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JPY: USD/JPY Mimics Tsys as Funding Currencies Benefit from Lower Front-E

JPY

USD/JPY's pull lower continues to mimick the move in Treasury yields, with the 10y yield now just a few bps away from closing the gap opened by the data-inspired rally yesterday. USD/JPY needs to drop a further 65 pips to do the same, but intraday momentum is clearly pointed lower here.

  • 15 minute candlestick chart shows horizontal support layered between 147.58 and 147.73 (the 50% retracement of the upleg off the Wednesday low), with futures volumes improving into the NY crossover (cumulative activity in the JPY now close to 20% ahead of average for this time of day).
  • JPY is not alone in rallying, with CHF also firmer as funding currencies globally benefit from the lower short-end yields in the US. USD/CHF eyes a break of yesterday's lows of 0.8647 to work further against the bounce off 0.8433 in early August - the bear trigger.

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