USD/JPY hits fresh highs near 108.30, still heads for a weekly loss

• Wall Street posts strong gains and US yields move higher, supporting USD/JPY. 
• Mixed US data: upbeat jobs report and lower-than-expected numbers from the manufacturing sector. 

The USD/JPY pair printed a fresh daily high during the American session at 108.31. It failed to extend the rally on top and it was trading at 108.20, consolidating weekly losses. 

Supported by yields, data and stocks 

The pair moved sideways on Friday with a bullish bias supported by risk appetite. Equity prices in Wall Street are rising with main indexes up almost 1% near all-time-highs. At the same time, US yields are higher today, rebounding from weekly lows. 

Economic data from the US came in mixed. NFP rose above expectations while the ISM Manufacturing Index showed a rebound but below expectations.  “It was as busy a week as one can get in terms of economic data. Third quarter GDP results hit the wire on Wednesday, followed by a 25 bps cut from the FOMC. A solid outturn for October payrolls and a modest improvement in the ISM manufacturing index were other notable developments that suggest the U.S. economy continues to trek through a forest of uncertainty”, explained Wells Fargo analysts. 

During the American session some optimism about US/China trade talks offered support to the pair. It was reported that China and US trade representatives, including Treasury Secretary Mnuchin and Chinese Vice Premier Liu had a “constructive” talk today. 

The Yen is about to end the week higher versus the US Dollar following relevant US data and the FOMC and Bank of Japan meetings. The USD/JPY found support at the 20-week moving average around 108.00. A consolidation above 108.75 would likely point to further gains while under 108.00 more losses should be expected.