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JPY: USD/JPY Techs Still Bullish Despite Pullback, Door Open For Dec BoJ Hike

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Yen was comfortably the top G10 performer for Thursday's session. Yen rose just over 0.90% and tracks close to 152.00 in early Friday dealings. Intra-session lows from Thursday trade were at 151.84, with yen aided by some hawkish Ueda comments from late yesterday, while the equity risk off also helped on a cross basis. 

  • Bank of Japan Governor Kazuo Ueda on Thursday left the door open to a rate hike in December, saying downside risks to the U.S. economy had fallen, but noting fresh risks stemming from next week’s presidential election. See the MNI BoJ Watch here.
  • GBP/JPY was particularly weak through Thursday trade, as fallout from the UK budget continues. GBPJPY plummeted 1.6%, erasing a considerable amount of the late October upswing in the process, the pair last near 196.10/15.
  • For USD/JPY technicals, the Oct 25 low at 151.46 remains intact. The 20-day EMA is further south at 150.32. On the upside, recent highs crest 153.88. The broader technical backdrop still remains bullish. US-JP yield differentials sit just off recent highs.
  • 1 week implied vol for USD/JPY sits above 17% as we head into next week's US election. This is towards the upper end of the YTD range, but in August we got to 22.9%. The 1 month sits just under 13%, off recent highs near 14%.
  • On the data calendar today, we have Oct PMI revisions for the manufacturing Jibun Bank measure (the initial read was 49.0).
  • In the option expiry space, the note following for NY cut later: Y152.00($575mln), Y153.00($606mln). 
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Yen was comfortably the top G10 performer for Thursday's session. Yen rose just over 0.90% and tracks close to 152.00 in early Friday dealings. Intra-session lows from Thursday trade were at 151.84, with yen aided by some hawkish Ueda comments from late yesterday, while the equity risk off also helped on a cross basis. 

  • Bank of Japan Governor Kazuo Ueda on Thursday left the door open to a rate hike in December, saying downside risks to the U.S. economy had fallen, but noting fresh risks stemming from next week’s presidential election. See the MNI BoJ Watch here.
  • GBP/JPY was particularly weak through Thursday trade, as fallout from the UK budget continues. GBPJPY plummeted 1.6%, erasing a considerable amount of the late October upswing in the process, the pair last near 196.10/15.
  • For USD/JPY technicals, the Oct 25 low at 151.46 remains intact. The 20-day EMA is further south at 150.32. On the upside, recent highs crest 153.88. The broader technical backdrop still remains bullish. US-JP yield differentials sit just off recent highs.
  • 1 week implied vol for USD/JPY sits above 17% as we head into next week's US election. This is towards the upper end of the YTD range, but in August we got to 22.9%. The 1 month sits just under 13%, off recent highs near 14%.
  • On the data calendar today, we have Oct PMI revisions for the manufacturing Jibun Bank measure (the initial read was 49.0).
  • In the option expiry space, the note following for NY cut later: Y152.00($575mln), Y153.00($606mln).