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JPY: USD/JPY Holding Near 147.00 Amid Higher US Yields/Oil Prices

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USD/JPY largely tracked sideways post the Asia close on Thursday. Moves above 147.00 drew selling interest, while dips sub 146.50 were supported. We track near 146.90 in early Friday dealings, having lost 0.31% for Thursday's session. Only EUR saw a more modest fall in the G10 space (0.13%), as GBP weakness post dovish BoE rhetoric and A$ and NZD falls dominated.

  • For USD/JPY yesterday's intra-session high was 147.24, while beyond that lies 148.05, the Aug 19 high. The 20-day EMA sits back at 143.90 on the downside.
  • US-JP yield differentials with firmer through Thursday trade, spreads now comfortably off Sep lows. The 10yr back to +300bps (against recent lows around +274bps). The ISM services beat in the US helped this trend, although the employment sub index faltered.
  • The oil price spike also works against Japan's terms of trade backdrop, with reports Israel may strike Iranian oil facilities in retaliation for this week's missile strikes.  
  • Yesterday Japan government officials (including the finance minister) met with BoJ Governor Ueda in an attempt to calm market sentiment around BoJ/Government unity. This followed the prior day's meeting with new PM Ishiba, in which the PM's dovish remarks weighed on yen.
  • Also note the new PM has reportedly instructed cabinet to draft a new economic package, with measures aimed at supporting households, per Kyodo.
  • Locally today the data calendar is empty. Note following in the option expiry space for NY cut later: Y146.25($880mln), Y146.50($730mln), Y148.00($818mln). 
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USD/JPY largely tracked sideways post the Asia close on Thursday. Moves above 147.00 drew selling interest, while dips sub 146.50 were supported. We track near 146.90 in early Friday dealings, having lost 0.31% for Thursday's session. Only EUR saw a more modest fall in the G10 space (0.13%), as GBP weakness post dovish BoE rhetoric and A$ and NZD falls dominated.

  • For USD/JPY yesterday's intra-session high was 147.24, while beyond that lies 148.05, the Aug 19 high. The 20-day EMA sits back at 143.90 on the downside.
  • US-JP yield differentials with firmer through Thursday trade, spreads now comfortably off Sep lows. The 10yr back to +300bps (against recent lows around +274bps). The ISM services beat in the US helped this trend, although the employment sub index faltered.
  • The oil price spike also works against Japan's terms of trade backdrop, with reports Israel may strike Iranian oil facilities in retaliation for this week's missile strikes.  
  • Yesterday Japan government officials (including the finance minister) met with BoJ Governor Ueda in an attempt to calm market sentiment around BoJ/Government unity. This followed the prior day's meeting with new PM Ishiba, in which the PM's dovish remarks weighed on yen.
  • Also note the new PM has reportedly instructed cabinet to draft a new economic package, with measures aimed at supporting households, per Kyodo.
  • Locally today the data calendar is empty. Note following in the option expiry space for NY cut later: Y146.25($880mln), Y146.50($730mln), Y148.00($818mln).