USD/JPY Back Below 20-Day EMA

Yen was the second best performer in the G10 space (after NOK) on Friday, rallying just over 1.3%. USD/JPY got close to 142.00, and we currently sit just a touch above Friday session lows, last in the 142.15/20 region.

• Technically, support at the 142.86 20-day EMA and the 142.19 former bull channel top have both given way, signaling scope for a deeper correction. Over the longer-term, the primary trend direction remains up and short-term weakness is considered corrective - for now. Note the Jun 20 low came in at 141.21.
• The US payrolls miss, including the negative revisions, weighed heavily on the USD, although yield differentials, particularly at the back end (US-JP 10yr spreads) are still pointing to higher USD/JPY levels. Short term correlations with yield spreads and USD/JPY appear to have weakened though.
• Local Japan yields didn't show a huge reaction to Friday's stronger than expected wages data.
• Equity market weakness in the US on Friday may aided yen at the margins as well, with the currency outperforming some higher beta plays, except for NOK.
• Today, the local data calendar has May trade balance figures and the current account. Bank lending for June is also on tap, while later on the eco watchers survey is out.