Ueda Induced Gains Not Sustained, As Steeper US Curve Supports USD

USD/JPY slumped to just under 147.00 (low of 146.99) as BoJ Governor Ueda's press conference on Tuesday (post the BoJ decision) delivered some slightly hawkish leaning remarks. However, from there we mostly recovered ground, getting to 148.70 in Tuesday NY trade. The pair tracks near 148.35 in early Wednesday dealings.

• Broader USD sentiment was supported as Tuesday's session unfolded, bear steepening across the Treasury curve prompted a firm dollar recovery, with the DXY extending year-to-date highs and printing the best levels since mid-December.
• This helped stabilize US-JP 10yr yield differentials, which sit near +345bps, down slightly from recent highs.
• Tuesday moves keep us broadly within recent ranges for USD/JPY, albeit with a brief sip sub the 100-day MA (147.47). Short term sentiment is likely to shift back to being driven by US developments. Upside pressures may be capped to a degree though given the door is still ajar for an April BoJ shift, coupled with recent rhetoric around FX weakness.
• The data calendar today has the Dec trade data, along with Jan preliminary PMI figures.