U.S. CPI Set To Dominate

It has been a fairly limited round of Tokyo trade for USD/JPY, with a lack of tier 1 macro headline news flow evident. Still, the uptick in local equities has allowed the cross to build on yesterday's modest gains (which came alongside an advance for the major U.S. equity indices), leaving the cross a handful of pips higher at Y110.45 into London hours.

• As ever, the broader risk tone will be at the fore for the pair on Tuesday, with U.S. CPI data providing the main highlight from a macro/U.S. Tsy yield perspective.
• Our technical analyst notes that the recent bear leg is considered corrective. In his view, a resumption of gains would refocus attention on the July 2 high (Y111.66), while a deeper sell-off would expose near-term support at the June 7 low (Y109.19).
• There is nothing in the way of notable option expiries at today's 10AM NY cut, although Thursday will see the following expiry: Y111.00-15 ($1.2bn).