Outperforms On US Yield Slump, Cabinet Reshuffle Expected Today

The yen rose nearly 1.8% for Wednesday's session, the top performer in the G10 space. We sit around the 142.85 level in recent dealings. Wednesday lows came in at 142.65. Downside focus will be on Dec 7 lows near 141.70. Highs from yesterday came in just shy of 146.00.

• The yen benefited from the sharp pull back in US yields post the FOMC. The dot plot forecast of rate cuts next year, coupled with little push back from Fed Chair Powell weighed heavily on US yields.
• For USD/JPY, we will see some JGB yield catch up to the downside today, but US moves continue to drive US-JP yield differentials. Even with the better tone to US equities during Wednesday trade we didn't see yen underperformance against the higher beta plays.
• On the data front today we have Oct core machine orders along with weekly investment flows. Later on, final IP for Oct is due.
• The other focus point will be an expected cabinet reshuffle announced today by PM Kishida, which follows the funding scandal engulfing parts of the ruling LDP. Note headlines crossed from Kyodo that Tokyo prosecutors would raid offices of the LDP, see this BBG link.