Better Risk Sentiment Dents Yen Friday, Focus Turns To BoJ Summary Of Opinions

A turnaround in risk appetite allowed USD/JPY to eke out some gains on the last trading day of last week. The rate was supported by firmer U.S. Tsy yields, with a firm rebound in the equity space aiding broader sentiment.

• USD/JPY 1-month risk reversal moved out of sync with the spot rate on Friday, plunging deeper into negative territory, suggesting that options traders are increasingly bearish.
• Spot USD/JPY last deals at Y135.18, down 5 pips on the day. Initial bullish focus falls on Jun 22, 2022 high/Oct 30, 1998 high of Y136.71/136.88. On the flip side, a retreat under Jun 23 low of Y134.27 would bring key support from Jun 16 low of 131.50 into play.
• PM Kishida is in Germany, where he takes part in a G7 summit and prepares to attend a NATO summit later this week. Both events are set to be dominated by Russia's invasion of Ukraine, although geopolitical matters related to the Indo-Pacific are also on the agenda.
• Participants are on the lookout for the summary of opinions from the BoJ's most recent monetary policy meeting, when the Board decided to stick with their ultra-loose policy settings despite the market testing their resolve. The document will be published shortly.
• Local data calendar is light today, with releases set to pick up in a couple of days. Retail sales (Wednesday), flash industrial output (Thursday) as well as unemployment, Tankan Survey & Tokyo CPI (Friday) headline this week.