USD/JPY spikes to 108.75 on hopes of US delaying tariff hike

• US and China are reportedly planning to delay the tariff hike. 
• 10-year US Treasury bond yield erases daily losses on upbeat mood.
• S&P 500 futures turn positive on the day ahead of Wall Street's opening bell.

The USD/JPY pair rose sharply after the Wall Street Journal reported that the US' and China's negotiators were working toward delaying the tariff hike. After spiking to a fresh daily high of 108.75, the pair retreated slightly and was last seen trading at 108.62, where it was up 0.05% on a daily basis.

Risk-on flows start to dominate markets

"US and Chinese trade negotiators are laying the groundwork for a delay of a fresh round of tariffs set to kick in on Dec. 15, according to officials on both sides," the WSJ wrote. The market reaction to this headline also allowed the 10-year US Treasury bond yield to erase its daily losses and helped the S&P 500 futures to move into the positive territory, pointing out to a positive shift in the market sentiment.

Meanwhile, the US Dollar Index continues to move sideways a little above the 97.50 mark to allow the risk perception to continue to drive the pair's action.

Earlier today, the NFIB Business Optimism Index in the US rose to 104.7 in November from 102.4 but the Unit Labor Costs rose 2.5% in the third quarter to fall short of the market expectation for an increase of 3.3%. Nevertheless, these reading were largely ignored by the market participants ahead of the FOMC's monetary policy announcements on Wednesday. 

Technical levels to consider