USD/JPY sits at Y107.08, has already.....>

DOLLAR-YEN: USD/JPY sits at Y107.08, has already shed 41 pips in reaction to an

SCMP source story pointing to no progress on key issues in deputy-level

U.S.-China trade talks. The publication triggered broad-based risk-off flows,

allowing the yen to benefit from its safe haven status.

- The pair added 39 pips Wednesday as a stronger that expected PBoC fix and

press reports suggesting that China is open for a limited trade deal with the

U.S. supported risk appetite. The upswing was sustained in NY hours amid

recovery in DXY, owing to higher U.S. Tsy yields & a firmer S&P500.

- Bears keep an eye on the nearby support zone at Y106.96-90, which hosts the

low of Sep 24, 38.2% retracement of the Aug 26 - Sep 18 rally & the 50-DMA. A

clean dip through that region would open up Y106.48/47, which represent the Oct

3 low/50% retracement of the aforementioned move. Bull look for a break above

the 100-DMA, which kicks in at Y107.59.

- Japanese PPI and core machine orders are awaited later today, while BoJ

Governor Amamiya will speak at a conference in Tokyo.