USD/JPY climbs to fresh six month highs above 109.60

• 10-year US Treasury bond yield loses traction on Friday.
• Stock markets in US will close early due to Thanksgiving Day holiday.
• US Dollar Index pushes higher above 98.40 handle.

The USD/JPY pair is inching higher ahead of the American session on Friday supported by the broad-based USD strength. As of writing, the pair was trading at its highest level since late May at 109.61, adding 0.1% on a daily basis.

In the absence of significant macroeconomic drivers, the greenback preserved its strength and helped the pair gain traction. With the major European currencies such as the EUR and the GBP struggling to find demand, the US Dollar Index advanced to its highest level in more than two weeks at 98.45. 

Market focus to remain on US-China trade dispute

In the meantime, the modest gains witnessed in European stocks on Friday point out to a positive market sentiment, which makes it difficult for the JPY to stay resilient against the USD. Although the 10-year US Treasury bond yield is posting modest losses on the day following a bullish opening gap, it remains on track to close the week in the positive territory.

The US bond markets and stock markets will close early on Friday and the pair is unlikely to fluctuate sharply in the remainder of the day. Meanwhile, investors will be paying close attention to fresh developments surrounding the US-China trade conflict after US President Trump signed the Hong Kong Human Rights and Democracy Act into bill earlier in the week to revive concerns over heightened political tensions hurting trade negotiations. 

Technical levels to watch for

USD/JPY