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JPY: Yen Falters on Higher US Yields, BoJ Summary Of Opinions, Tankan Today

JPY
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USD/JPY spent most of the post Asia close period on Monday pushing higher. From lows at 141.65 we got close to 144.00, but track near 143.65/70 in early Tuesday dealings. The late US session surge for USD/JPY came as Fed Chair Powell spoke and appeared to push back against further aggressive rate cuts in the near term. Yen fell close to 1% for Monday's session, the worst G10 performer. 

  • These comments helped US Tsy yields rise across the key benchmarks, with the front end leading. The 2yr yield pushed to 3.64% up 8bps for Monday's session. This has helped stabilize US-JP yield differentials. The 2yr spread hasn't made a fresh low since mid Sep.
  • For USD/JPY technicals, key resistance is seen at 146.40, the 50-day EMA, while downside focus rests on a test below 140.00. The broader backdrop suggests recent gains are corrective in the pair, with the trend needle still pointing south.
  • Locally today, we have the August jobless rate and job to applicant ratio, which are expected to print close to July outcomes. The Tankan survey also prints for Q3. The market expects a slight downtick for large manufacturers' sentiment, but all industry Capex is projected higher at 11.9% (versus 11.1% in Q2).
  • Note we also get the BoJ Summary of Opinions from the September policy meeting.
  • The Japan general election will be held on OCt 27th, incoming PM Ishiba said late yesterday, confirming what the NHK reported earlier in the day.
  • In the option expiry space, note the following for NY cut later - Y142.00($525mln), Y143.30-50($1.0bln), Y143.80-00($1.2bln). 
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USD/JPY spent most of the post Asia close period on Monday pushing higher. From lows at 141.65 we got close to 144.00, but track near 143.65/70 in early Tuesday dealings. The late US session surge for USD/JPY came as Fed Chair Powell spoke and appeared to push back against further aggressive rate cuts in the near term. Yen fell close to 1% for Monday's session, the worst G10 performer. 

  • These comments helped US Tsy yields rise across the key benchmarks, with the front end leading. The 2yr yield pushed to 3.64% up 8bps for Monday's session. This has helped stabilize US-JP yield differentials. The 2yr spread hasn't made a fresh low since mid Sep.
  • For USD/JPY technicals, key resistance is seen at 146.40, the 50-day EMA, while downside focus rests on a test below 140.00. The broader backdrop suggests recent gains are corrective in the pair, with the trend needle still pointing south.
  • Locally today, we have the August jobless rate and job to applicant ratio, which are expected to print close to July outcomes. The Tankan survey also prints for Q3. The market expects a slight downtick for large manufacturers' sentiment, but all industry Capex is projected higher at 11.9% (versus 11.1% in Q2).
  • Note we also get the BoJ Summary of Opinions from the September policy meeting.
  • The Japan general election will be held on OCt 27th, incoming PM Ishiba said late yesterday, confirming what the NHK reported earlier in the day.
  • In the option expiry space, note the following for NY cut later - Y142.00($525mln), Y143.30-50($1.0bln), Y143.80-00($1.2bln).