USD/JPY Consolidates Above 148, Dec National CPI Out Today

USD/JPY drifted marginally higher post the Asia close on Thursday. From lows of 147.66 we track in the 148.10/15 region in early Friday trade. Overall, this left the pair little changed for Thursday's session, in line with a broader consolidation in USD index levels.

• The broader technical backdrop still looks supportive for the pair. This week’s gains have resulted in a break of 146.41, the Jan 11 high, confirming a resumption of the bull cycle. The move higher opens 149.16 next, a Fibonacci retracement. A key short-term support has been defined at 144.36, the Jan 12 low.
• US-JP yield differentials for the 10yr tenor sit at multi week highs, although the rate of improvement slowed through Thursday's session.
• The local focus today will be on the National CPI print for Dec. The market expects slower y/y momentum across all 3 metrics. Headline is projected at 2.5% y/y (from 2.8%), ex fresh food at 2.3% y/y (2.5% prior) and ex fresh-food & energy at 3.7% (versus 3.8% prior). Also out is the Nov tertiary activity index.
• In the option expiry space, we have the following for NY cut later: Y145.70($981mln), Y146.00($1.2bln), Y146.50-57($980mln), Y147.00($651mln), Y147.45($533mln), Y148.00($864mln).