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USD/JPY Back To 150.00 On US Yield Recovery, September Wages Data Out Today

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USD/JPY gravitated higher post the Asia close on Monday. By late NY trade were back above 150.0. Early Monday session lows were around 149.25. The rebound in US yields aided a broader USD recovery, which also drove modest yen underperformance. The currency lost 0.45% for the session, the second worst performer in the G10 space after NZD.

  • US-JP yield differentials continue to be driven by broader US swings. US yields were 8-10bps firmer across the curve, as the SLOOS credit survey suggested less tight credit conditions in Q3 (although other factors supported the yield rebound).
  • Japan yields remain off recent highs, while BoJ Governor Ueda didn't hint at any dramatic near term policy shifts yesterday. The central bank still doesn't have enough clarity that the inflation target is within sight.
  • Today we get Sep real and nominal cash earnings, with wages being a key input to the BoJ outlook. The market expects -2.3% y/y for real earnings (prior -2.8%), while nominal are expected to rise 1.2% (prior 0.8%). Household spending is expected at -2.9% y/y (prior -2.5%).
  • Note it was reported late yesterday by Nikkei that the government will meet with labor groups and businesses later this month to discuss continued wage increases (see this BBG link).
  • In the options space we have the following nearby expiries - Tuesday NY cut - 150.00 ($881.8m), 149.00 ($765.3m).
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USD/JPY gravitated higher post the Asia close on Monday. By late NY trade were back above 150.0. Early Monday session lows were around 149.25. The rebound in US yields aided a broader USD recovery, which also drove modest yen underperformance. The currency lost 0.45% for the session, the second worst performer in the G10 space after NZD.

  • US-JP yield differentials continue to be driven by broader US swings. US yields were 8-10bps firmer across the curve, as the SLOOS credit survey suggested less tight credit conditions in Q3 (although other factors supported the yield rebound).
  • Japan yields remain off recent highs, while BoJ Governor Ueda didn't hint at any dramatic near term policy shifts yesterday. The central bank still doesn't have enough clarity that the inflation target is within sight.
  • Today we get Sep real and nominal cash earnings, with wages being a key input to the BoJ outlook. The market expects -2.3% y/y for real earnings (prior -2.8%), while nominal are expected to rise 1.2% (prior 0.8%). Household spending is expected at -2.9% y/y (prior -2.5%).
  • Note it was reported late yesterday by Nikkei that the government will meet with labor groups and businesses later this month to discuss continued wage increases (see this BBG link).
  • In the options space we have the following nearby expiries - Tuesday NY cut - 150.00 ($881.8m), 149.00 ($765.3m).