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  • US Commerce Secretary Ross announces 90-day extension to Huawei ban.
  • 10-year US Treasury bond yield extends recovery, adds more than 5%.
  • US Dollar Index posts small daily gains above 98.20.

The USD/JPY pair gained traction in the last minutes and extended its daily rally to a fresh session high of 106.69 boosted by the upbeat market sentiment. As of writing, the pair was up 0.26% on a daily basis at 106.65.

Sentiment turns positive at the start of the week

During an interview with Fox Business, US Commerce Secretary Wilbur Ross said that they will be granting a 90-day extension to Huawei ban to trigger fresh risk-on flows. The 10-year US Treasury bond stretched higher on Ross’ remarks and is now adding more than 5% on the day. Additionally, the S&P 500 Futures is up more than 1% to suggest that Wall Street’s main indexes are likely to start the day sharply higher.

Meanwhile, the Greenback is taking advantage of the rising T-bond yields with the US Dollar Index posting small daily gains above the 98.20 handle and providing additional support to the pair’s advance.

There won’t be any macroeconomic data releases in the remainder of the day and the market’s risk perception is likely to continue to drive the pair’s action. A decisive rally in US stocks could help the pair push higher in the second half of the day. Earlier in the day, the data from Japan showed that the trade deficit in July widened more than expected to revive hopes of more stimulus from the Bank of Japan and weighed on the JPY.

Technical levels to consider