JPY: Yen Up Nearly 2% This Week, Household Spending Out Today

USD/JPY was volatile as US data prints crossed on Thursday. From lows of 142.85, around the time of the US ADP miss, the pair pushed back above 144.00, as resilient ISM services data crossed. We spent the rest of the US session tracking lower, last near 143.40/45 in early Friday Asia Pac trade, as US equity sentiment softened.

• The pull back in USD/JPY this week has been impressive, the yen up nearly 2% week to date, comfortably the best G10 FX performer. Earlier highs were at 147.21. Before this high note we have the 20-day EMA at 146.21 as a potential resistance point. A break of Thursday intra-session lows will see renewed focus on August 5 lows at 141.70, which is also the bear trigger. These levels are short-term parameters to be mindful of as the US NFP approaches.
• Yen, and to lesser extent CHF, have benefited from the softer US yield backdrop, as focus shifts to whether the Fed easing cycle will kick off with a 50bps cut. Tonight's US NFP report will be a key gauge for such risks. Outside of US yield moves, global equity wobbles and the softer commodity price backdrop have been other yen positives in recent sessions.
• The local data calendar has July household spending on tap today, which could see some focus given yesterday's labor earnings beat. The market expects spending to rise 1.2% y/y (prior was -1.4%y/y).
• Yesterday's speech by BoJ board member Takata hinted a steady BoJ hand at the September meeting, but still left the door ajar for further policy adjustments if data unfolds as projected by the central bank.
• In the option space, note the following expiries for coming sessions: Sep09 Y142.60-70($2.8bln), Y145.00($1.1bln), Y146.50($2.0bln); Sep10 Y145.70-80($2.8bln); Sep11 Y142.50-60($3.3bln).