USD/JPY: spiked though the 110 handle, risk appetite improving

Currently, USD/JPY is trading at 110.13, up 0.46% on the day, having posted a daily high at 110.15 and low at 109.61.

Forex today: dollar benefits from less risk-off

USD/JPY has spiked through the 110 handle as markets continue to discount the risks associated to the geopolitical tensions between the US and North Korea that are now taking a back seat. Although, that is not to say that markets are risk on nor are the bulls out of the woods yet. However, according to the Wall Street Journal, North Korean Leader Kim Jong Un has decided to not launch a "threatened" missile attack on Guam. He did warn though that he could change his mind if the United States "persist in their extremely dangerous reckless actions".

Meanwhile, US 10yr treasury yields rose from 2.20% to 2.23%, 2yr yields from 1.30% to 1.32% overnight and the Fed fund futures yields also firmed. They are now pricing in the chance of a December rate hike at around 43% (from 37%). Analysts at Westpac noted that contributing to the yield rise was Fed dove Dudley who thought another hike this year is appropriate.

USD/JPY levels

USDJPY: Buy dips towards 109.30/40

Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, technical indicators entered bullish territory with strong upward slopes. "However, the price remains well below its 100 and 200 SMAs, with the shortest around 110.45, the level to surpass to confirm additional gains ahead."