Hawkish Fedspeak Helps Push USD/JPY Past Y145

The yen was broadly firmer on Thursday, as participants flew to safety, but still underperformed the greenback. Hawkish Fedspeak pushed USD/JPY higher, with the pair showing above Y145.00.

• U.S. weekly jobless claims rose more than expected, according to data released on the eve of the key monthly jobs report, which helped spoil market sentiment. Fed members continued to push back against the idea of an imminent pivot, with Governor Waller reinforcing the Fed’s commitment to fighting inflation during the NY-Asia crossover
• Benchmark equity indices faltered across Europe and the U.S., with Asia-Pac futures moving into the red. The VIX index rebounded from its worst levels in nearly two weeks, adding ~7.1% come the end of play.
• U.S./Japan yield spreads widened as Fed members kept beating the hawkish drum. 2-year differential expanded 11.2bp, while 10-year gap grew 6.9bp. Note that the yield on 10-Year JGBs was within touching distance from the BoJ's 0.25% cap at Thursday's close.
• Spot USD/JPY trades at Y145.01, down 13 pips on the day. The move through Y145.00 puts the market on alert for renewed verbal interventions by Japanese officials. Topside technical focus is on Sep 22/2.764 proj of the Aug 2 - 8 - 11 price swing at Y145.90/146.03. Bears look for losses towards Sep 22 low of Y140.36.
• Monthly earnings/spending data headline the local economic docket today.