USD/JPY rallies over 50-pips on N. Korean headlines

   •  Rallies on news that N. Korea is open to denuclearization talks.
   •  The sudden upsurge in the US bond yields supportive of the up-move.

The USD/JPY pair quickly reversed a dip to sub-106.00 level and rallied over 50-pips over the past hour or so.

Despite a mildly softer tone surrounding the US Dollar, the pair caught some strong bids and the latest leg of sharp uptick seems to have been driven by news headlines that N. Korea is open to denuclearization talks.

Against the backdrop of receding fears of a global trade war, the news further fueled the prevalent risk-on mood and dampened the Japanese Yen's safe-haven appeal.

Improving appetite for riskier assets was further reinforced by a sudden surge in the US Treasury bond yields, which remained supportive of the pair's rise back closer to session tops.

The pair has now moved into positive territory for the second consecutive session as traders now shift their focus to the New York Fed President William Dudley's speech for some fresh impetus. 

Technical levels to watch

A follow-through buying interest beyond mid-106.00s has the potential to continue lifting the pair beyond the 107.00 handle towards its next major hurdle near the 107.35-40 zone.

On the flip side, 106.10-106.00 area now seems to act as immediate support, which if broken might turn the pair vulnerable to head back towards testing multi-month lows support near the 105.35-25 region.