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USD/JPY Down On Lower US Yields, Dec Jobless Data Out Today

JPY

The yen was the third best performer in the G10 FX space for Monday's session, rising 0.44% against the USD. USD/JPY got close to 147.25 late in NY trade on Monday. We sit slightly higher now, last near 147.50. Recall that early Monday highs were at 148.34.

  • Yen benefited from a broadly softer USD tone, albeit with EUR underperforming. Lower US yields, as the US Tsy lowered its Q1 borrowing estimate, was a clear positive for the yen. Cash US Tsy yields were around -3 to -6.5bps lower across the benchmarks.
  • We are now comfortably off mid Jan highs from a US-JP 10yr yield differential standpoint.
  • For USD/JPY we are still some distance from the Jan 24 low at 146.66, while the 50-day EMA sits further south at 146.08.
  • Today we have the Dec jobless rate and job-to-applicant ratio data. The market looks for steady outcomes (2.5% jobless rate).
  • On the FX option expiry front note the following for NY cut later: 147.20 (551mln), 148.00 (679mln).
  • Finally, Toyota's worker union is seeking higher wages and a large bonus payment as part of this year's wage negotiation. See this BBG link for more details.
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