USD/JPY regains 107.00 and above, daily highs

• JPY trades on the defensive as risk aversion dissipates.
• Spot retakes the 107.00 handle and moves to session tops.
• US-China trade war concerns fizzled out, sparking risk-on mood.

The better tone around the risk-associated universe is helping USD/JPY to move further north of 107.00 the figure and record at the same time fresh daily peaks in the 107.10/15 band.

USD/JPY looks to risk trends for direction

Following Friday’s retracement to the 106.80 area in the wake of poor US Payrolls for the month of March, the pair met fresh buyers earlier today amidst a moderate pick up in the risk-on sentiment.

Furthermore, US-China concerns over a probable trade war appears mitigated at the beginning of the week, particularly after President Trump showed confidence that both parties could come to an agreement eventually.

On the positioning front, JPY speculators turned net long for the first time since late November 2016 during the week ended on April 3, according to the latest CFTC report.

Data wise, Japanese current account came in at a non-seasonally-adjusted ¥2.076 trillion in February, missing consensus. In addition, Household Confidence stayed at 44.3 in March and Economy Watchers Current Index improved to 48.9 during last month. In the US docket, Producer Prices are due tomorrow ahead of CPI figures and the FOMC minutes expected on Wednesday.

USD/JPY levels to consider

As of writing the pair is gaining 0.21% at 107.16 facing the next up barrier at 107.50 (high Apr.5) seconded by 107.92 (high Feb.21) and then 110.48 (high Feb.2). On the other hand, a breakdown of 106.57 (10-day sma) would open the door to 106.26 (21-day sma) and finally 105.66 (low Apr.2).