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JPY Off Best Levels Of The Day As Core Global Yields Edge Higher

JPY
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JPY has faded from best levels of the day, with USD/JPY at 156.85 vs. session lows of 156.67. Some modest weakness in core global FI markets seems to facilitate the move, as yield differentials move slightly against the yen.

  • The weekend saw Japanese Vice Finance Minister Kanda reaffirm a willingness to act against “excessive” FX moves.
  • Those comments, while familiar, were enough to promote a light JPY bid in Tokyo trade.
  • FX intervention risk continues to command a large share of JPY-related discussions.
  • Elsewhere, continued speculation surrounding a further reduction in the size of BoJ JGB purchases supported the JPY in Tokyo hours.
  • BoJ rhetoric also helped, with Deputy Governor Uchida suggesting that the end of the fight with deflation is in sight.
  • Technically, USD/JPY is holding on to last week’s gains. The pair managed to breach resistance at the May 14 high (156.74) and the 61.8% retracement of the Apr 29-May 3 sell off (157.00).
  • A continuation higher would open the May 1 high (157.99).
  • Conversely, initial support comes in at the 20- and 50-day EMAs (155.70 & 154.03, respectively).
  • Friday’s Tokyo CPI data headlines this week’s Japanese data calendar, with comments from BoJ’s Adachi (Wednesday) and the latest round of scheduled BoJ JGB purchases (Friday) also eyed.
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JPY has faded from best levels of the day, with USD/JPY at 156.85 vs. session lows of 156.67. Some modest weakness in core global FI markets seems to facilitate the move, as yield differentials move slightly against the yen.

  • The weekend saw Japanese Vice Finance Minister Kanda reaffirm a willingness to act against “excessive” FX moves.
  • Those comments, while familiar, were enough to promote a light JPY bid in Tokyo trade.
  • FX intervention risk continues to command a large share of JPY-related discussions.
  • Elsewhere, continued speculation surrounding a further reduction in the size of BoJ JGB purchases supported the JPY in Tokyo hours.
  • BoJ rhetoric also helped, with Deputy Governor Uchida suggesting that the end of the fight with deflation is in sight.
  • Technically, USD/JPY is holding on to last week’s gains. The pair managed to breach resistance at the May 14 high (156.74) and the 61.8% retracement of the Apr 29-May 3 sell off (157.00).
  • A continuation higher would open the May 1 high (157.99).
  • Conversely, initial support comes in at the 20- and 50-day EMAs (155.70 & 154.03, respectively).
  • Friday’s Tokyo CPI data headlines this week’s Japanese data calendar, with comments from BoJ’s Adachi (Wednesday) and the latest round of scheduled BoJ JGB purchases (Friday) also eyed.