Equity Weakness Helps JPY Outperform, July National CPI On Tap Today

USD/JPY spent most of the post Asia close on Thursday moving away from recent highs. Support was evident on pullbacks to the 145.60/65 region, while we finished the NY session near 145.85. This left the yen +0.35% firmer, the best performer within the G10 space. Yesterday highs in the pair came in around the 146.55 level.

• Despite Thursday's modest pull back in the pair, the technical picture still remains bullish in USD/JPY. Upside focus is on 147.49, a Fibonacci projection. Moving average studies are in a bull mode condition. Initial firm support to watch is 143.35, the 20-day EMA.
• The yen benefited on Thursday from cross asset moves, with late US equity market weakness weighing on risk appetite and helping yen outperform against higher beta crosses.
• US yields ended mixed. The 10yr at 4.27%, still up for the session, but down session highs near 4.33%. The 2yr backed away from 5.00% (finishing near 4.93%). Focus is likely to remain Japan yields as well today after yesterday's poor 20-yr debt auction drove higher JGB yields at the back end of the curve.
• Today we have July National CPI on tap. The market expects headline at 3.3% y/y (prior 3.3%), while the core measures are expected at 3.1% y/y for ex fresh food (prior 3.3%), while excluding fresh food and energy is forecast at 4.3% y/y (prior 4.2%).
• Also note US President Biden will host Japan PM Kishida and South Korean PM Yoon at Camp David for a trilateral summit.