USD/JPY bulls lapping up positive tones all around, eyeing 110 handle

• USD/JPY holding in firmly bullish territories, awaiting next round of positive news.
• China’s National Health Commission said the number of new, confirmed coronavirus cases fell to 2,478 from 3,062 a day earlier.
• Federal Reserve's Chair, Jerome Powell, sounded positive in his semi-annual testimony to Congress.

USD/JPY ranged between 109.75 and 109.95, as the defensive yen was underperforming in a risk-on environment on Wall Street. At the time of writing, USD/JPY is stuck in a tight range between 109.76 and 109.88.

Markets await the next round of catalysts in economic data and a cautiously optimistic Federal Reserve chair Jerome Powell who continues his semi-annual congressional testimony, appearing before the Senate Banking Committee later today in New York.

A better risk sentiment on Wall Street

It was a better risk sentiment overnight since China’s National Health Commission said the number of new, confirmed coronavirus cases fell to 2,478 from 3,062 a day earlier, bringing the total to 42,638 on the mainland, including some of whom have since recovered and been released from treatment.

As a result, Wall Street rallied and US 2-year treasury yields rose from 1.40% to 1.42%, 10-year yields from 1.57% to 1.59%, lifting the US dollar and sending the yen and risk asset classes such as gold a touch lower. The S&P 500 and Nasdaq Composite each posting a record finish and the Dow Jones Industrial Average was virtually unchanged.

Such news has lifted risk appetite and sentiment in global financial and commodity markets (copper +0.97%, CRB index +0.44% time of writing) as it is signifying that the Chinese are making progress in combatting and containing the virus. 

Meanwhile, Federal Reserve's Chair, Jerome Powell, sounded positive but had a cautious tone in his semi-annual testimony to Congress, although there were enough upbeat assessments in his tone to support optimism on Wall Street:

"The FOMC believes that the current stance of monetary policy will support continued economic growth, a strong labour market, and inflation returning to the Committee's symmetric 2 percent objective. As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy will likely remain appropriate".

USD/JPY levels