Rangebound In Tokyo

The slightly defensive feel to Asia-Pac trade, aided by softer than expected Chinese economic data and a downtick for the major regional equity indices in the wake of a similar move on Wall St. on Tuesday, allowed the USD/JPY to shed ~10 pips during Tokyo trade, leaving the pair at Y109.60 into London dealing. Local Japanese news flow continues to be dominated by the domestic political situation and jostling apparent ahead of the leadership vote atop the ruling LDP Party.

• To recap, Tuesday saw narrow trade into NY hours, with the softer than expected U.S. CPI reading dragging the rate lower on the day, allowing the pair to have a look through the Aug 31 low, although a challenge of the Aug 24 low was not forthcoming (Y109.41). Below there, key technical support is located at the Aug 4 low and bear trigger (Y108.72). To the topside, the key level of resistance continues to reside at the Aug 11 high (Y110.80)
• The following area presents the only notable nearby point of interest re: option expiries at today's 10AM NY cut: Y109.60-80 ($1.5bn).
• There is a lack of tier 1 headline risk events slated on Wednesday, meaning that broader headline and market flows will likely be in the driving seat.