USD/JPY retreats from multi-week highs, stays in green near 107.70

Boosted by the improved market sentiment amid renewed trade optimism, the USD/JPY rose to its highest level since August 1 at 107.85 but struggled to  |  11/09/2019 10:33
  • US Dollar Index climbs above 98.50 on Wednesday. 
  • China announces list of US imports exempt from tariffs.
  • Coming up: August Producer Price Index from US.

Boosted by the improved market sentiment amid renewed trade optimism, the USD/JPY rose to its highest level since August 1 at 107.85 but struggled to preserve its bullish momentum. As of writing, the pair was up 0.17% on a daily basis at 107.72.

Earlier today, in an attempt to further ease the trade tension with the US, China's Finance Ministry released a list of US imports that will be exempt from China's tariffs. "China will consider tariff exemptions for additional products imported from the US," Chinese state news agency Xinhua reported. 

Major European equity indexes gained traction on this announcement to reflect the strengthening risk-appetite, which made it difficult for the safe-haven JPY to find demand. Furthermore, the broad-based USD strength helped the pair continue to push higher. At the moment, the US Dollar Index is up 0.23% on the day at 98.55.

Eyes on Wall Street

Later today, the US Bureau of Labor Statistics will release the Producer Price Index (PPI) data for August. Markets expect the core PPI that excludes food and energy price to tick up to 2.2% in August from 2.1%. In addition to the PPI data, markets will be paying close attention to the performance of Wall Street's main indexes to see if risk-on flows will continue to dominate the markets.

Meanwhile, the 10-year US Treasury bond yield is posting modest daily losses despite the upbeat mood but this move seems to be a technical correction of the week-long rally that lifted the yield to its best level since August 12.

Technical levels to watch for

 

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