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JPY: USD/JPY Continues To Track Lower, BoJ Hike Odds Firmer, 200 day MA At 152

JPY
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USD/JPY continues to gravitate lower, the pair last near 152.45/50, close to session lows. Note the simple 200-day MA comes in at 152.00, which has been a support point since late Oct, when we broke back above this resistance point. Beyond that lies the 50-day EMA near at 151.50. 

  • BoJ pricing around the rate outlook has firmed. Markets are now giving a Dec hike more than a 50% chance. Below is market pricing for a 25bps point move at upcoming meetings.
  • Dec-24, 58%, Jan-25 78%,  Mar-25, 93% and  May-25 125%.
  • Confidence is likely to be marginally higher given recent service price trends, while PM Ishiba is encouraging strong wage gains to continue into 2025.
  • US-JP yield differentials have stabilized somewhat but remain comfortably off recent highs.
  • FX options activity in terms of larger volumes today has been focused on JPY calls at lower USD/JPY levels (148.00-152.00 strike ranges). 
     
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USD/JPY continues to gravitate lower, the pair last near 152.45/50, close to session lows. Note the simple 200-day MA comes in at 152.00, which has been a support point since late Oct, when we broke back above this resistance point. Beyond that lies the 50-day EMA near at 151.50. 

  • BoJ pricing around the rate outlook has firmed. Markets are now giving a Dec hike more than a 50% chance. Below is market pricing for a 25bps point move at upcoming meetings.
  • Dec-24, 58%, Jan-25 78%,  Mar-25, 93% and  May-25 125%.
  • Confidence is likely to be marginally higher given recent service price trends, while PM Ishiba is encouraging strong wage gains to continue into 2025.
  • US-JP yield differentials have stabilized somewhat but remain comfortably off recent highs.
  • FX options activity in terms of larger volumes today has been focused on JPY calls at lower USD/JPY levels (148.00-152.00 strike ranges).