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   “¢   Renewed US-China trade talks weigh on JPY’s safe-haven appeal.
   “¢   Goodish pickup in the US bond yields provides an additional boost.
   “¢   Further gains remain capped amid the ongoing USD profit-taking.

 
The USD/JPY pair struggled to build on its intraday rebound and was now seen oscillating in a narrow trading range, below the 111.00 handle.  

The pair once again managed to find decent support near the 110.45 area and quickly reversed an Asian session dip on news of renewed US-China trade talks. China on Thursday said that a delegation led by its vice commerce minister would travel to the US for talks in late August and helped Asian equity markets to pare early losses.  

Improving investors’ risk-appetite was evident from a goodish pickup in the US Treasury bond yields, which was eventually seen weighing on the Japanese Yen’s safe-haven appeal and helped the pair to recover early lost ground.  

On the economic data front, today’s disappointing Japanese trade balance data, coming in to show an unexpected deficit of ¥45.6 billion as compared to a surplus of ¥20.7 billion anticipated remains supportive of the modest intraday rebound.

Further gains, however, remained capped amid the ongoing US Dollar profit-taking slide and hence, it would be prudent to wait for a strong follow-through buying before assuming that the pair might have bottomed out in the near-term.

Moving ahead, today’s second-tier US economic releases, featuring housing market data, Philly Fed Manufacturing Index and the usual initial weekly jobless claims, will now be looked upon for some short-term trading impetus later during the early North-American session.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: “A close above 111.43 (yesterday high) would invalidate previous day’s bearish outside-day candle and signal an upside break of the falling wedge pattern, opening the doors to a sustained move above the Aug. 1 high of 112.15.”

“On the other hand, a close below 110.43 (previous day’s low) would add credence to the bearish outside-day candle and would shift risk in favor of a drop to wedge support, currently seen around 109.90,” he adds further.