FX Action: USD-JPY and Yen crosses have remained buoyant
FX Action: USD-JPY and Yen crosses have remained buoyant amid a backdrop of firm global equity markets. USD-JPY retested 109.00 but has so far left yesterday's one-week peak at 109.08 untroubled. EUR-JPY and AUD-JPY, meanwhile, have posted fresh one-week and 11-day highs, respectively. Hopes for a breakthrough in the U.S.-China trade standoff are continuing to run high. Both sides agreed to extend talks into an unscheduled third day amid reports of progress on Chinese imports of U.S. goods and increased access to Chinese markets, and Bloomberg cited sources reporting that President Trump, who tweeted that "talks are going very well," is now eager to strike a deal. The MSCI Asia-Pacific (ex-Japan) index has gained over 1.5%, reaching a 26-day high. The S&P 500 index closed on Wall Street yesterday with a 0.97% gain, and S&P 500 futures are showing an 0.4% advance in overnight trading. The increased optimism has seen Fed funds futures price back in odds for a 25 bp rate hike in 2019. In Japan today, wages data came in on the warm side of expectations, rising 2.0% y/y versus the median forecast for 1.2% y/y. Analysts advise trend-following USD-JPY gains. Support comes in at 108.35.