Outperforms On Safe Haven Demand, USD/JPY May Lows Remain Intact Though

Yen finished Thursday's session slightly weaker against the USD (-0.14%), but outperformed the rest of the G10. The session was marked by safe haven demand, as US regional banking, debt ceiling and slowing economic conditions, all weighed on risk appetite. Commodity FX were notable underperformers. US equities and yields finished lower, although aggregate moves were modest for Thursday's session overall.

• USD/JPY got to a low of 133.75, which coincided with lows in US equities and US yields. We rebounded though back above 134.50 by the close, which is where we currently track. This leaves earlier May lows at 133.50 currently intact.
• Clearance of this level would confirm a resumption of the current bear cycle and open 133.02, the Apr 26 low. Note too that a break of 133.50 would confirm a breach of the 50-day EMA - a bearish development. Initial resistance is at 135.47, Wednesday’s high.
• On the data front today, it is just money stock figures for Apr in y/y terms, which are unlikely to be a market mover.
• In the vol space, 1 month implieds remain close to multi month lows, just under 9.50%. Risk reversals have drifted higher, but at -1.2725 remain comfortably below earlier month highs around -0.80.