USD/JPY Closes In On Recent Highs, Cabinet Set To Approve Extra Budget

USD/JPY sits just below Thursday session highs, last tracking near 151.35. The yen lost around 0.25% for the session, one of the better G10 performers on a relative value basis. Higher US yields boosted the pair, but some offset came from weaker US equity sentiment.

• From a technical standpoint, bulls remain in the drivers seat. 152.20, a Fibonacci projection is a topside target. before this we have recent highs just above 151.70. Key support lies at the 50-day EMA, 148.64.
• Firm US yield gains (+10-15bps across the curve), amid hawkish Powell rhetoric and a poor 30yr auction driving the move. There will be some catch up from JGB yields today, but yield US-JP momentum has stabilized, albeit with current USD/JPY levels still a little high relative to such trends.
• Locally, we just have Oct money stock figures today.
• BoJ Governor Ueda's recent appearances before local parliament has still left uncertainty over the timing around the central bank's exit from easy policy conditions (see this link).
• Late yesterday it was reported that the cabinet is set to pass a ¥13.2trln extra budget, two thirds of which will be funded extra bond issuance (see this BBG link for more details).