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Intervention Estimates Remain In Focus, USD/JPY Higher With US Yields

JPY
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Yen lost around 0.90% for Tuesday's session. USD/JPY rose steadily post the Asia close, the pair tracking near session highs in early Wednesday dealings, the pair last 157.70/75. Yen was mid range from a relative G10 standpoint, as the USD rallied strongly into month end (BBDXY up 0.60%, DXY +0.68%).

  • Headlines crossed late yesterday from Bloomberg, which were related to the BOJ’s release of projected "Sources of Changes in Current Account Balances at the Bank of Japan and Market Operations" for May 1 when FX transactions on Apr 29 settle.
  • This hints at the potential size of Monday's likely FX intervention, which Bloomberg puts at around ¥5.5trln (see this link for more details). Sell side analysts note we should know more around the 9th of May, while official MOF intervention data will be published at the end of this month (for the end April period).
  • Elsewhere, Yen was weighed by the rise in US yields amid the firmer employment cost print. Fed easing expectations for 2024 were pared further. Cash Tsy yields finished around 5-7.5bps higher.
  • Topside levels for USD/JPY include 158.44, the Apr 26 high. On the downside we have 154.24, the 20-day EMA.
  • On the data front today we have the final April manufacturing PMI print. The preliminary print came in at 49.9.
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Yen lost around 0.90% for Tuesday's session. USD/JPY rose steadily post the Asia close, the pair tracking near session highs in early Wednesday dealings, the pair last 157.70/75. Yen was mid range from a relative G10 standpoint, as the USD rallied strongly into month end (BBDXY up 0.60%, DXY +0.68%).

  • Headlines crossed late yesterday from Bloomberg, which were related to the BOJ’s release of projected "Sources of Changes in Current Account Balances at the Bank of Japan and Market Operations" for May 1 when FX transactions on Apr 29 settle.
  • This hints at the potential size of Monday's likely FX intervention, which Bloomberg puts at around ¥5.5trln (see this link for more details). Sell side analysts note we should know more around the 9th of May, while official MOF intervention data will be published at the end of this month (for the end April period).
  • Elsewhere, Yen was weighed by the rise in US yields amid the firmer employment cost print. Fed easing expectations for 2024 were pared further. Cash Tsy yields finished around 5-7.5bps higher.
  • Topside levels for USD/JPY include 158.44, the Apr 26 high. On the downside we have 154.24, the 20-day EMA.
  • On the data front today we have the final April manufacturing PMI print. The preliminary print came in at 49.9.