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Greenback strength drove USD/JPY higher on Monday, albeit the yen was the second-best performer in G10 FX space amid broader risk aversion. Participants bought the USD as they prepared for Wednesday's monetary policy decision from U.S. FOMC. USD/JPY respected the prior day's range.

  • PM Kishida conceded that the government will allow municipalities to distribute Y100,000 handouts fully in cash by the year-end, reversing earlier plans to allocate half of this sum for coupons distributed to eligible households next spring. FinMin Suzuki expressed hope today that cash handouts will help bolster consumption.
  • Final industrial output hits the wires today. Later this week, focus turns to trade balance & flash Jibun Bank PMIs (Thursday) as well as BoJ monetary policy decision (Friday).
  • USD/JPY sits at Y113.59 as we type, a touch higher on the day. A clearance of Dec 8/Nov 29 highs of Y113.95/96 would give bulls a green light for targeting Nov 24 high of Y115.52. Bears look for a fall through Nov 30 low of Y112.53, a key near-term support.

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