Falls For The First Time In Over A Week, BoJ Uncertainty & Higher US Yields Weigh

USD/JPY had a rough 100pip range through the US CPI print, from above 148.00 to the low 147.00 region. We were supported on dips, although couldn't recapture the 148.00 handle. We track in the 147.65/70 region in early Wednesday dealings. Yen lost 0.50% for Tuesday's session, it's first lost since the start of last week.

• Yen was already under pressure yesterday post comments by BoJ Governor Ueda, which presented a more balanced backdrop around current economic conditions, noting weak parts of consumer spending.
• Late yesterday a BBG sources report noted a March hike at next week's meeting was too close to call, see this link. Reuters noted that the BoJ is likely to give guidance on the bond-buying pace post the end to YCC to help curb any rise in long term rates (see this link).
• Elsewhere, yield differentials have swung back in favor of the USD post the firmer CPI print, with US cash Tsy yields 5-6bps higher, while rate cut expectations were pared. This, along with a supportive equity market backdrop, kept USD/JPY dips supported.
• Levels wise for USD/JPY, recent lows at 146.49 remain intact, beyond that lies the Feb 1 at 145.90, which is also key support. On the topside 148.40 is the 50-day EMA.
• The data calendar is empty today, but note the following expiries for NY cut later: Y147.25-35($1.6bln), Y147.75($899mln), Y148.50($842mln), Y149.50($1.1bln).