It has been a level that has been limiting gains in the pair since early December up until now with further resistance then seen closer towards the 110.00 handle.
Japanese exporter offers have been noted around 109.50-70 and that is part of the reason why we're seeing the level hold for now but the upside pressure is building up once again.
Today, it's all about flows as we're seeing risk trades fare much better. The yuan is stronger alongside emerging market assets, with gold and the yen weaker as a result.
Optimism surrounding the US-China Phase One trade deal signing is touted as the reason but in my view, that is pretty much a given and completely factored into what we're seeing in the price over the past two weeks already.
That said, it's hard to argue with a technical break especially if buyers start to go chasing a move above the 110.00 handle. However, I reckon that might require the details of the US-China deal to be relatively comforting for markets.
If anything else, keep an eye on US stocks as well with earnings season kicking off this week. A continued push to fresh record highs could be the right tonic for yen pairs to keep the upside momentum in the week ahead.