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  • USD/JPY looks to benefit from trade optimism, USD rebound.
  • Holiday season in Japan keeps trading activity subdued.
  • Focus shifts to US macro news for fresh trading impetus.

USD/JPY is seen stalling its Asian range trade into early Europe, as the bulls gather some strength above the 200-DMA at 108.68 in a bid to test the 109 handle.

The spot traded flat almost throughout the Asian session amid holiday-thinned markets while increased nervousness stepping into 2020 buoyed the sentiment around the anti-risk yen. Japanese markets remain closed in observance of 4-day Bank Holiday.

Over the last hour, broad-based US dollar rebound from multi-month lows combined with risk-on market profile amid US-China phase one trade deal optimism and Chinese central bank RRR cut appear to help USD/JPY regain some recovery momentum.

The latest uptick in the major can be also associated with the fresh buying interest seen around the S&P 500 futures and Eurostoxx futures that point to a positive start on the European indices. Meanwhile, modest gains in the US Treasury yields also remain USD/JPY supportive.

Attention now turns towards the US weekly Jobless Claims and Markit Manufacturing PMI data for fresh trading impetus on the prices, as markets ignore the report that China suspended Shanghai-London Stock Scheme over political tensions with UK.

USD/JPY Technical levels to consider