Struggling Again

USD/JPY trades 1 big figure higher on the day, running as high as Y122.73 at its intraday peak, remaining comfortably within the recently observed range, with well-defined technical parameters apparent. Latest headline flow unlikely to be a trigger, little of note out there.

• The move might be driven by Tokyo reaction to the BoJ once again re-affirming its dovish credentials via its Q2 Rinban plan, as it looks to exert greater control over the yield curve via more frequent and larger (in cumulative terms) operations after the recent test of its YCC parameters.
• U.S./Japanese yield spreads have widened from both ends in Tokyo trade, with Tsys cheaper and JGBs richer, with that micro-dynamic likely amplifying the impact of yield spread movements.
• On top of that, a deterioration in sentiment among Japan's large manufacturers revealed by the BoJ's Q1 Tankan Survey underscored the need for the central bank to stick to its ultra-loose monetary policy stance. Confidence among large manufacturers worsened for the first time in seven quarters.
• The rate now changes hands at Y122.69, up 99 pips on the day, while the yen is comfortably the worst G10 performer. Worth noting that the pair's RSI is lurking into overbought territory again.