Underperforming Broader USD Sell-Off, PPI On Tap Today

Yen was a laggard last week, rising only 0.13% against the USD, the weakest performer in the G10 space. We tracked near 149.45 in early Monday dealings, which is close to end Friday levels from last week. Friday's session didn't see much of a drift away from the 149.50 level, with an early dip back to 149.15/20 supported.

• In the technical space, focus remains on the sharp rebound from last Tuesday's 147.15 low. This remains the key watch point on the downside, while 151.95, the Oct 2022 high is the focus on the upside.
• Yen underperformance last week reflected a continued recovery in broader risk appetite, particularly in the equity space, which weighed on yen against higher beta crosses.
• The recovery in core yields, led by the EU, is another headwind, given generally lower beta JGB moves to such yield shifts. US-JP yield differentials ended last week comfortably above recent lows (10yr differential in the government bond yield space last around +369bps).
• The data calendar has the Oct PPI on tap today, +2.1% y/y forecast (prior 2.1%). This follows last Friday's slightly weaker than expected CPI prints, albeit with solid core m/m outcomes. Later on today the final oct machine tool orders print is out.