USD/JPY Corrective Bounce Continues

Yen was one of the weaker G10 performers through Wednesday's session. We were off 0.7%, which left USD/JPY close to 134.50, which is around NY session highs and where we currently track. The upside focus remains on a potential breach of the Dec 14 low of 134.54. Beyond that is the 200-day EMA at 135.05. On the downside, dips sub 133.50 were supported post the Asia close.

• There is little in the way of domestic event risks today, with the next major release not scheduled until the new year.
• Yen will remain at the whim of broader risk flows and US cash Tsy yield momentum. The latter appears to be dominating for now, with US-JP spreads swinging back in the USDs favor in recent sessions.
• The yen received little benefit from the weaker equity tone through EU/US markets, as a number of countries placed testing requirements on travelers arriving from China, as local case numbers surge in China.
• The carry-over from the BoJ Opinion Summary, released yesterday, which pushed back against the idea of the yield band widening being seen as a tightening shift, arguably didn't help yen sentiment either.