USD/JPY Back Close 134.00 As BoJ Takes Center Stage

USD/JPY got near 133.20 post the Asia close before rebounding nearly 100pips to 134.20, on the back of a firmer US yield backdrop. This came post stronger than expected US inflation reads for Q1. USD/JPY sits just below 134.00 currently. The yen was the second worst performer in the G10 space for Thursday's session, down just over 0.2% (CHF lost slightly more ground).

• The improved equity tone in the US also likely reduced safe haven appeal for the yen. Near +2% gains for the SPX, coupled with the VIX back to 17%, saw yen lose ground against NZD and AUD.
• Today, the main focus is on the BoJ outcome. No major changes are expected in terms of policy parameters (see this link for our full preview), but focus is likely to rest on the outlook/guidance and whether the central bank announces a review around its longer term performance and policy settings.
• There is also a slew of data releases today, Mar jobless rate, job-to-applicant ratio, Apr Tokyo CPI (core ex fresh-food and energy is forecast at 3.5% y/y, prior was 3.4%), Mar retail sales and Mar IP. Then later on Mar housing starts.
• In the vol space, 1 week implied got close to 15%, but now sits slightly lower near 14.50%. The 1 month is around 10.90%, still showing a benign picture relative to earlier in the year. 1 week (-3.28) and 1 month (-1.7975) risk reversals are slightly above recent lows.