Jan Highs For USD/JPY Within Sight Post US NFP Data

USD/JPY surged to 148.60 post the US payrolls beat on Friday in US trade. Pre NFP levels were around 146.65/70. Yen tracks around 148.35 in early Monday dealings, after losing around 1.3% in Friday trade, the second worst performer in the G10 space. The BBDXY rose 0.63%, the DXY 0.85% in Friday's session.

• For USD/JPY, Friday's bounce narrows the gap with the January highs which reside at 148.80, closely followed by 149.16, a Fibonacci retracement. The trend outlook is unchanged and remains bullish, moving average studies have recently crossed and are now in a bull-mode set-up.
• This reinforces the current trend condition and highlights positive market sentiment. For reference, notable levels further out include 149.75 and 150.78, the November 22 and 17 highs respectively.
• The US-JP 10yr government bond yield spread ended Friday around +335bps (versus recent lows under +320bps). Focus today will be on the extent of the JGB catch up, although the US side will continue to be the key driver of this spread.
• The local data calendar just has final PMI prints for Jan today. Tomorrow, we have Dec labor and real cash earnings data, which should be of greater focus.