Rarified Air

The yen is slightly softer in early Asia-Pac trade, USD/JPY up around 6 pips at 108.37, the pair briefly grazed 108.48 before pulling slightly.

• Data earlier in the session showed the current account surplus narrowed to JPY 646.8bn in December against expectations of a JPY 1.25tn surplus, while the trade deficit widened to JPY 130.1bn. Bank lending including trusts rose 6.2%, after a 6.0% rise in January.
• From a technical perspective USD/JPY outlook remains bullish as the pair continues to climb with the trend also accelerating. Trend conditions are in overbought territory however this is not having an impact and reinforces the underlying bullish sentiment. 108.00 has been cleared together with a number of resistance levels just above 108.00. The focus is on 109.00 and 109.70. The latter is the Jun 8 2020 high. Initial support is Friday's intraday low of 107.82.
• BoJ Deputy Governor Amamiya will speak later today (15:00 Tokyo Time, 06:00 London). Focus will fall on whether Amamiya's comments follow on from Governor Kuroda's Friday musings in which he pushed back against the need for a widening of the permitted 10-Year JGB yield band.