USD/JPY pushes higher toward 109 amid improved market sentiment

The USD/JPY pair started the week on a high note as the demand for the safe-haven JPY weakened on strengthening risk appetite. As of writing, the pair was trading at its fresh session low of 108.70, gaining 0.82% on the day.

Major global equity indexes are making a comeback after recording modest losses during the second half of the previous week. After Japan's Nikkei 225 Index closed the day 1.4% higher, European stocks gained traction with Germany's DAX Index and Europe's EuroStoxx 600 Index both adding around 1% at the moment, also making it likely for Wall Street to make a positive start to the day. 

The improving market sentiment is also reflected upon the yields for safer US Treasury bonds, which struggle to find demand on Monday. The fact that the Hurricane Irma lost strength and was downgraded to a category one storm allowed investors to take a breath of a sigh. As of writing, the yield for 10-year T-bond was at 2.1%, up 1.85% on the day while the US Dollar Index was at 91.60 (+0.3%).

• Has the US 10-year Treasury yield bottomed out?

The economic calendar won't be offering any data that could impact the price action in the remainder of the day and a robust performance of US stocks could allow the pair to extend its daily gains.

Technical outlook

The initial hurdle for the pair could be seen at 109.25 (20-DMA) ahead of 110.00 (50-DMA/psychological level) and 110.80 (100-DMA). On the downside, supports are located at 108.15 (daily low), 107.30 (Sep. 8 low) and 107.00 (psychological level). The RSI on the H4 graph is pushing higher above the 50 mark, suggesting that the short-term bullish momentum is building up.