USD/JPY operates at Y109.49, 3 pips......>

DOLLAR-YEN: USD/JPY operates at Y109.49, 3 pips shy of neutral levels & 9 pips

below its new 2020 high printed on Thursday. The rate's rally was driven by a

continued recovery in risk appetite, with U.S.-Iran tensions easing further.

Elsewhere, U.S. Pres Trump reaffirmed his intention to start phase-two trade

talks with China immediately (although he stressed their finalisation may have

to wait until after the U.S. election). Improved sentiment saw S&P500 hit a new

all-time high, which further supported USD/JPY.

- The Dec 2 high of Y109.73 is now firmly in sight, drawing bullish attention. A

break here would confirm that bulls are in the driving seat, bringing the upper

1.0% 10-DMA envelope at Y109.87 into play. Bears keep an eye on the

psychological Y109.00 level, which coincides with the 50-DMA. Below opens the

200-DMA, which intersects at Y108.60.

- The focus turns to Japanese household spending, due at the bottom of the hour.

- Looking ahead, next week Japan reports its BoP data (Tuesday), PPI & core

machine orders (Thursday). Eco Watchers Survey comes out on Tursday, BoJ Gov

Kuroda speaks on Wednesday.