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Close To 150.00, Weaker US Equity Tone Doesn't Weigh On Yen Crosses


USD/JPY slipped to 149.69 in NY trade amid broad USD weakness. Earlier Asia Pac highs were at 150.44 from Tuesday trade. We track closer to 150.00 in early Wednesday dealings, as the USD found support amid equity weakness late in US trade.

  • For Tuesday's session, the yen was marginally higher against the dollar, generally lagging most of the G10 (outperforming CAD post weaker CPI data).
  • US yields are lower, particularly at the front end, 2yr back to 4.61%, off ~3bps. A combination of spill over from EU bond moves and the weaker Canadian CPI seemingly driving the moves.
  • For USD/JPY, US-JP 10yr yield differentials have largely tracked sideways, last near +354bps, which has helped USD/JPY consolidate around the 150.00 region.
  • Equity sentiment in the was weighed by weakness in chip stocks ahead of key earnings for Nvidia on Wednesday. Still, this didn't drive material yen outperformance on crosses.
  • Today on the data front we have Jan trade figures, followed by Jan F machine tool orders later on.
  • In the option expiry space, note the following for NY cut later: Y148.50-55($566mln), Y149.72-75($595mln), Y149.95-00($1.8bln).

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