USD/JPY Faded Above 131.00, Outperforms G10 Modestly

JPY was volatile post the Asia close. The pair spiked above 131.00 as US PMI data printed better than expected, but this was quickly reversed as the Richmond Fed came in below market forecasts. We got back below 130.00, before stabilizing to currently sit at 130.10/15. Yen was best performer within the G10 space (+0.4%), at the margins, for Tuesday's session.

• The weaker US cash Tsy yield backdrop helped yen, with moves of -6-8bps in the 10-30yr part of the curve. US real yields also continued to track lower, the 10yr now back to 1.19%. US survey data, in aggregate, is pointing to downside risks for next week's ISM print.
• Other cross asset signals were more mixed, with equities off slightly, while the aggregate Bloomberg commodity index slipped (-0.54%) led by oil.
• Locally, the focus is likely to remain on BoJ's bond/loan operations as it continues to manage its YCC program.
• On the data front, it is just the final leading and coincident indices for Nov on tap, which are unlikely to move market sentiment.