USD/JPY: Better bid amid reports China to boost purchases of US farm products

• USD/JPY is extending gains amid easing of US-China trade tensions. 
• China is planning to buy more US farm products, according to Xinhua news agency. 
• US Treasury yields, however, remain flatlined and could cap the upside in the USD/JPY pair. 

The already bid USD/JPY is extending gains on reports that China is planning to buy more US farm products as a goodwill gesture ahead of the next month's high-level trade talks. 

China's move comes after the decision by the US to exempt hundreds of products from a 25% duty imposed by President Trump on $250 billion worth of Chinese goods. 

The risk assets are responding positively to the latest developments on the trade front. Notably, the futures on the S&P 500 are reporting a 0.20% gain. 

That could be the reason behind the drop in the anti-risk JPY. As of writing, the USD/JPY pair is trading at 107.33, representing 0.26% gains on the day. The currency pair added 20 pips to hit a session high of 107.43 in the last one hour, having defended 107.00 in the overnight trade. 

The gains, however, could be short-lived if the US yields extend Tuesday's drop. It is worth noting that the 10-year yield is currently flatlined at 1.65%, despite the uptick in the S&P 500 futures, having dropped by seven basis points on Tuesday. 

Technical levels