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JPY: USD/JPY Slightly Higher, Market Cautious Ahead Of Party Vote

JPY
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  • The yen weakened against major currencies ahead of Japan's ruling party vote for a new leader, who will likely become the next prime minister. USD/JPY is steady today up 0.05% at 144.84 and just above Wednesday's highs amid risk-on market conditions and stock market rallies. Despite a hawkish BOJ comments the pair reached a session high of 144.95 before and after the Tokyo fix.
  • Per MNI's technical team; USDJPY traded higher last week and remains above its most recent low. However, short-term gains appear corrective. Trend signals remain bearish and the pair traded to a fresh cycle low on Sep 16. The recent breach of key support at 141.70, the Aug 5 low, confirms a resumption of the downtrend. Sights are on 139.00 next, a Fibonacci projection. To the upside the 20-day EMA has been breached with the next key resistance is 146.57, the 50-day EMA. 
  • Japanese stocks rose as a weaker yen boosted exporters, with the Topix up 1.95% and the Nikkei gaining 2.5%. Chipmakers also surged after strong forecasts from Micron.
  • JGB curve has steepened as Japan's Finance Ministry offers 700b of 2.2% 40-year government bonds. Per SMBC analyst it appears to be down to a three-horse race with a Takaichi win will likely have the largest implications for the JGB market, noting Takaichi has explicitly called for the BOJ to continue monetary easing. 
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  • The yen weakened against major currencies ahead of Japan's ruling party vote for a new leader, who will likely become the next prime minister. USD/JPY is steady today up 0.05% at 144.84 and just above Wednesday's highs amid risk-on market conditions and stock market rallies. Despite a hawkish BOJ comments the pair reached a session high of 144.95 before and after the Tokyo fix.
  • Per MNI's technical team; USDJPY traded higher last week and remains above its most recent low. However, short-term gains appear corrective. Trend signals remain bearish and the pair traded to a fresh cycle low on Sep 16. The recent breach of key support at 141.70, the Aug 5 low, confirms a resumption of the downtrend. Sights are on 139.00 next, a Fibonacci projection. To the upside the 20-day EMA has been breached with the next key resistance is 146.57, the 50-day EMA. 
  • Japanese stocks rose as a weaker yen boosted exporters, with the Topix up 1.95% and the Nikkei gaining 2.5%. Chipmakers also surged after strong forecasts from Micron.
  • JGB curve has steepened as Japan's Finance Ministry offers 700b of 2.2% 40-year government bonds. Per SMBC analyst it appears to be down to a three-horse race with a Takaichi win will likely have the largest implications for the JGB market, noting Takaichi has explicitly called for the BOJ to continue monetary easing.