USD/JPY: Holds in tight range in the mid 111's with a bullish technical bias

• USD/JPY ranged between 111.35 and 111.60 as markets remained solid with respect to risk appetite, leaving the yen on the backfoot and underperforming. 
• USD/JPY is currently trading at 111.43, between a range of 111.35 and 111.49, so far, in Tokyo's opening hour. 

Optimism surrounding trade talks was once again underpinning positive risk sentiment overnight. The South China Morning Post is reporting that trade talks are 90% of the way towards an agreement as a fresh round of talks kicked off on Wednesday in Washington amid upbeat hopes of finalising a comprehensive agreement to end their protracted trade war.

Meanwhile, US data came with the March US ISM services sector PMI printing on the low side of expectations at 56.1 (est: 58) from 59.7, an 18-month low though although still consistent with reasonable growth momentum. 

Ahead of this week's nonfarm payrolls showdown, analysts at Westpac noted that the ADP survey of employment showed a lower than expected gain of 129k in Mar vs an upwardly revised 197k in the prior month, "flagging a loss of hiring momentum though the track record of this report as a gauge of payrolls (due later this week) is an open question."

As for yields, the US 10yr treasury yield rose from 2.47% to 2.52% while the 2yr yield added 4 basis points from 2.30% to 2.34%. The dollar remains anchored on the basis that the Fed funds futures still imply the chances of a Fed rate cut by December receded from 90% to 80%.

USD/JPY levels

Valeria Bednarik, Chief Analyst at FXStreet, explained that the pair met buyers at 111.20 this Wednesday, the 61.8% retracement of its March decline, later reaching a higher high, a sign that bulls remain in control of the pair and could try to push it up to the top of the range, also the yearly high, at 112.13:

"The short-term picture is neutral-to-bullish, as, in the 4 hours chart, technical indicators remain within positive levels, but without directional strength, while the 20 SMA extended its advance above the larger ones, all of them below the current level."