USD/JPY edged higher overnight, as.......>

DOLLAR-YEN: USD/JPY edged higher overnight, as optimistic comments re: the

ongoing Sino-U.S. trade negotiations revived risk appetite, putting the yen on

the defensive. The rate last sits at Y111.71, 5 pips higher on the day. Chinese

President Xi called for a quick conclusion to the text of a bilateral trade

accord with the U.S. and noted substantial progress in talks with Washington;

elsewhere, Chinese VP Liu said that "a new consensus [with Washington] has been

reached."

- The pair tested the Y111.80 mark overnight, but failed to break above. A

breach of the level would open up the Mar 15/06 high of Y111.90/92, followed by

the Mar 5 YTD high of Y112.14. On the downside, the initial layer of support is

provided by the 200-DMA at Y111.49, breached yesterday, ahead of Y111.21, which

represents Wednesday's low. Also worth noting $1.36bn worth of options with

strikes at Y111.00 expire at today's 1000ET NY cut.

- Japanese highlights of the next week include BoP data due Monday, PPI & core

machine orders due Wednesday, as well as the usual BoJ Rinban ops. BoJ Gov

Kuroda will speak on Monday & Wednesday.