USD/JPY Firms On Dollar Bid, Equity Rally, Japanese Off'ls Meeting

USD/JPY advanced Thursday as the greenback firmed up against all of its G10 peers, aided by rising U.S. Tsy yields. The yen was limited by a positive showing from global equity markets & a meeting of senior off'ls from Japanese MoF, BoJ & FSR, who reiterated that they are keeping an eye on currency strength. Worth mentioning that per BBG North American traders were seeing stop-loss orders building between Y104.10-104.20. The rate topped out just shy of its 50-DMA & the Y104.00 mark, as it printed best levels since Dec 15.

• Thursday's meeting of Japanese financial off'ls suggests their continued sense of discomfort with the recent JPY appreciation. As a reminder, a Cabinet Office report described the Y103.00 level as a key level for maintaining profitability by non-manufacturers and noted that the Y100.20 level is seen as the turning point between profit and loss for big exporters.
• As expected, on Thursday evening PM Suga declared emergency in Tokyo, Kanagawa, Saitama and Chiba from today through Feb 7, amid a record surge in new Covid-19 infections in the capital.
• USD/JPY trades flat at Y103.82 at typing. A break above the 50-DMA/psychological resistance at Y103.98/104.00 would allow bulls to take aim at Dec 10 high of Y104.58. Bears keep an eye on the Y103.20 level mentioned in the Cabinet Office's report, followed by Jan 6 cycle low of Y102.59.
• Japan reports household spending at the bottom of the hour.
• Next week, focus turns to BoP current a/c balance & Eco Watchers Survey (Tuesday), flash machine tool orders (Wednesday) and core machine orders (Thursday).