USD/JPY Hits Fresh 2023 High, BOJ Speak Today

USD/JPY remained on the front foot post the Asia close on Tuesday. The pair getting to ~147.80, before settling back around 147.70 by the NY close, which is where we currently track. This was fresh highs in the pair back to November 2022. The yen lost 0.85% on Tuesday, as the USD saw broad based strength. The BBDXY gained ~0.70%, amid on-going US yield gains.

• Technically, the trend outlook is bullish, with spot rallying through resistance at 147.37, the Aug 29 high and the bull trigger. A clear break here confirms a resumption of the uptrend and opens 148.40, the Nov 4 2022 high. Last Friday’s low of 144.45 represents the key short-term support where a break would signal scope for a deeper correction.
• US yields pushed higher amid mixed Fed speak (Waller dovish, Mester hawkish), while heavy corporate supply likely aided yield momentum (the 10yr cash Tsy yield up +8bps to 4.26%). US-JP 10yr swap differentials are comfortably above +300bps now, with US moves continuing to outpace Japan's in the swap rate space.
• The local data calendar is empty today, but we do have BoJ Board Member Takata speaking at 10:30am local time (02:30 BST).
• Late yesterday the Finance Ministry stated the budget for next year would seek a record ¥114 trillion yen for the fiscal year starting in April 2024, which would be 3.9% increase (see this link).