USD/JPY lingers near 113.50 ahead of European trading
Asian equities are still riding the good news from the US-China trade rhetoric after China commits to purchasing more US soybeans and Trump reiterating that he will meet Xi for another round of trade talks "if need be". Chinese stocks are the ones leading gains on the day and that's helping to lift risk sentiment for the most part in Asian trading so far.
The Shanghai Composite index is up by 1.3% and that is helping to push gains in the Nikkei and the Hang Seng as well, which are up 1.0% and 0.9% respectively at the moment. Meanwhile, US equity futures are also trading higher with E-minis currently up by 0.3% on the day.
For USD/JPY, the pair remains supported from the 100-day MA (red line) and buyers managed to defend the level on Monday before a move higher above the July high @ 113.17 is observed currently. Further resistance is next seen around 113.80-85 before offers at the 114.00 level come into play.
There isn't much on the economic calendar and the options board to really impact the pair's movement today so trading sentiment will rely heavily upon how risk performs; more specifically how US equities are set to fare later on in the day.
With US equities giving back gains towards the end of trading overnight, I would expect European equities to remain tepid as US equity futures aren't showing much signs of an upbeat tone as of yet and that should keep USD/JPY confined around current levels ahead of US trading.
In the meantime, watch out for more headlines on the trade front as it may impact risk sentiment and that remains the key driver for yen pairs at the moment.
