May 20, 2024 21:40 GMT
USD/JPY Back Above 156.00, As US Yields Marginally Higher
JPY
USD/JPY pushed above 156.00 as Monday US trade unfolded. The pair got to around 156.30, but we sit slightly lower in early Tuesday dealing. The yen lost nearly 0.40% for the session to be the second worst performer in the G10 space. Sentiment was mostly positive towards the USD, as US yields tracked modestly higher.
- For USD/JPY, recent ranges remain intact. Upside focus rests with 156.74, the May 14 high. Beyond that lies 157.00, round figure resistance. The 20-day EMA is back at 155.18, the 50-day at 153.55.
- Fed Vice Chair for Supervision Barr said in prepared remarks for a keynote address that restrictive policy needs further time to do its work and that the Fed is in a good position to hold rates steady whilst it watches. This backdrop helped US yields firm and while overall moves were modest, it lent support to USD/JPY.
- The pair still looks too elevated relative to yield spread levels, although spreads are up from recent lows.
- The local data calendar just has April Tokyo condominiums for sale on tap today.
- A survey conducted by the BoJ noted that corporates/manufacturers would prefer FX stability is prioritized over from a policy standpoint rather than growth/inflation (see this BBG link).
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