Retreats From Nine-Year Low

A weaker greenback saw USD/JPY retreat from a nine-month high at 109.23 hit yesterday, the pair bottomed out at 108.42 towards the end of the US session, and has bounced early in Asia lastup 13 pips at 108.61. The pair is moving as a function of USD, so markets await a 10-year US auction later on Wednesday for hints on yield direction in the near term.

• Data late yesterday showed machine tool orders recorded the fastest growth since February 2018. Orders rose 36.7% Y/Y, foreign orders rose 66% while domestic orders dropped 4.8%.
• There were some reports in Kyodo that Japan has decided to exclude overseas spectators from attending the Tokyo Olympics, the Olympics Minister Murukawa said a decision would be made in late March.
• From a technical perspective the USD/JPY outlook remains bullish despite the modest pullback Tuesday. The pair extended the sequence of higher highs to 9 sessions Monday and registered a fresh high once again early Tuesday. Momentum studies are in overbought territory however this is not having an impact and instead reinforces the underlying bullish sentiment. The focus is on 109.70 next, the Jun 8 2020 high. Initial support is Friday's intraday low of 107.82.
• There is no local data on the economic docket today, markets look ahead to PPI data tomorrow, stock/bond flow data will also be released and the MOF will sell 20-Year debt.