USD/JPY +1% Above Monday's Lows, But MA Studies Remain In Bearish Mode

USD/JPY's rebound from late yesterday extended post the Asia close. The pair got close to 128.90, a decent recovery from 127.20/25 lows in yesterday's session. Some resistance was evident ahead of 128.80 later in the NY session, with the pair drifting down to 128.45/50, which is where we currently track. Market moves in the cross-asset space were fairly modest, with US markets closed for the MLK holiday.

• The recovery in USD/JPY looks like a consolidation following the sharp post US CPI sell-off from late last week.
• Moving average studies remain in a bear mode condition and a bearish price sequence highlights a clear downtrend. Furthermore, the 50- and 200-dmas have crossed, highlighting a potential bearish death cross. The focus is on 126.81, a Fibonacci projection. The first resistance is at 129.52, the Jan 3 low and a recent breakout point.
• 1 week implied vol is just off recent highs, last near 23%. Tomorrow's BoJ meeting remains in focus, with a number of options likely to be presented to the BoJ board, MNI understands (see this link for more details). These range from ramping up bond purchases to shifting YCC towards the 5yr part of the curve.
• On the data front today, the Nov tertiary industry index print is due (+0.1% forecast, versus +0.2% prior).