Holds Tight Range, Awaits CPI Report

USD/JPY wavered on Thursday, printing a fresh two-week low in the process and finishing just shy of opening levels. The rate stuck to the range stretching between Y103.33-103.67, with some chunky option expiries eyed in that area. $940 worth of USD puts with strikes at Y103.25, $1.5bn worth of USD puts with strikes at Y103.50-60 & $1.3bn worth of options with strikes at Y103.65-75 rolled off at the NY cut. Both sides of the pair struggled against their other G10 peers, with safe haven currencies undermined as U.S. equity benchmarks showed at record highs.

• Official forecasts released by the Japanese Cabinet Office on Thursday suggested that Japan looks to balance its budget in FY2030, unch. vs. the July projection.
• A quick look at upcoming option expiries reveals that $1.0bn of options with strikes at Y103.40-50 will roll off at the 10:00 ET cut today.
• In M&A news, BBG reported that Shiseido is in advanced talks to sell its personal-care business to CVC for as much as Y150-200bn.
• The Asahi reported that the Japanese gov't, Tokyo Metro Gov't & the organising committee are discussing three scenarios for hosting the Tokyo Olympics, one of which involves holding the event with no spectators. The final decision on the event is expected towards the end of March.
• USD/JPY trades at Y103.49, little changed on the day. A fall through Jan 21 low/61.8% retracement of the Jan 6 - 11 rally at Y103.33/28 would open up the next (76.4%) Fibo retracement level at Y103.02. Bulls need a clearance of channel top at Y104.09 before targeting Jan 11 high of Y104.40.
• Japanese CPI report, due at the bottom of the hour, and flash Jibun Bank PMIs headline the local docket today.
• Looking further afield, focus next week will fall on retail sales (Thursday) as well as Tokyo CPI, unemployment & flash industrial output (Friday).