USD/JPY rises above 108.60 on hopes of US delaying December tariff hike

• US could reportedly delay December tariff hike even if there is no deal with China.
• 10-year US Treasury bond yield is adding more than 1% on the day.
• US Dollar Index stays in its weekly range below 98.

The USD/JPY pair gained traction in the last hour after the latest headlines surrounding the United State (US)-China trade conflict triggered fresh risk-on flows and weighed on the safe-haven JPY. As of writing, the pair was posting small daily gains above 108.60.

Focus remains on US-China trade developments

“There is still some modicum of optimism that a watered-down deal can be reached before new US tariffs go into effect on December 15, but even if the deal proves elusive, sources say it is likely they will be at least postponed,” the South China Morning Post (SCMP) reported on Thursday.  

With the initial market reaction, the 10-year US Treasury bond yield edged higher as well to reaffirm the upbeat mood and was last seen adding a little more than 1% on a daily basis. Additionally, the S&P 500 futures turned positive on the day to suggest that Wall Street’s main indexes are likely to open higher.  

On the other hand, the US Dollar Index continues to move sideways below the 98 handle, allowing the risk perception to continue to impact the pair’s movements. Later in the session, Jobless Claims and Existing Home Sales data from the United States will be watched for fresh catalysts.

Technical levels to watch for