USD/JPY makes a run to break away from the 110 handle as the dollar strengthens


USD/JPY hits a high of 110.28, highest levels since 31 December


The greenback is gaining some solid ground on the new week as USD/CNY also rises back above 6.80 for the first time since 24 January. That is helping to see the dollar pare earlier losses against the likes of the kiwi and aussie. US yields are on the up as well so far today with 10-year yields higher by 1.8 bps to 2.652%, helping to give a lift to yen pairs in general as well.

Trade talks continue to be the key focus for risk assets this week but so far markets are taking it with renewed optimism as European equities are also surging higher alongside US equity futures.

E-minis 11-02

That is giving additional backing to the USD/JPY move here alongside the strength in the greenback.

However, I’d be a little bit wary of a break higher in the pair here as long as trade talks are still unresolved for the time being. The way I see it playing out is more optimistic tones but a meaningful trade deal/breakthrough is still not going to happen as both sides remain rather far apart especially on the issue of IP theft.

Offers are next seen around 110.50 and I’d be tempted to short the pair with a tight stop around those levels too given no new developments yet on the trade rhetoric.

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