USD/JPY clings to gains near 6-week tops, around 108.00 handle

• Fading safe-haven demand continues to weigh on the JPY and fuels the positive momentum.
• The USD remained well supported by surging US bond yields and contributes to the up-move.
• Traders now look forward to the ECB decision for some impetus ahead of the US CPI figures.

The USD/JPY pair jumped to fresh six-week tops during the Asian session on Thursday, albeit quickly retreated few pips thereafter and was last seen trading around the 108.00 handle.

The pair built on its recent strong recovery move from multi-year lows and continued gaining positive traction for the fourth consecutive session on Thursday amid encouraging US-China trade developments, which tend to undermine demand for traditional safe-haven currencies – like the Japanese Yen.

US-China trade optimism inspiring bulls

The US President Donald Trump said that he will delay a planned tariff hike on Chinese goods by two weeks as a gesture of goodwill to Beijing’s offer to buy more US agricultural products. This against the backdrop of growing optimism over the resumption of the US-China trade talks boosted the global risk sentiment.

The prevailing risk-on mood allowed the US Treasury bond yields to extend its recent upsurge and extended some additional support to the US Dollar, which continued inspiring bullish traders and further collaborated to the pair’s ongoing rally to an intraday high level of 108.17 – the highest since early-August.

Bulls, however, took some breather near 100-day SMA and preferred to wait for a fresh catalyst from the upcoming event risk, the ECB meeting, which might influence the USD price dynamics and provide a fresh impetus ahead of the release of US consumer inflation figures later during the early North-American session.