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USD/JPY Holding Above 140.00, June National CPI On Tap Today


USD/JPY got to fresh highs of 140.50 post the Asia close on Thursday, before the yen found some support late in NY trade (finishing closer to 140.00). This likely owed to the equity market pull back in US markets. Still yen finished the session 0.30% weaker, around mid-range from a G10 standpoint, with European currencies falling more (CHF down by 0.93%). The BBDXY gained close to 0.40% supported by higher US yields.

  • The simple 50-day MA comes in just above 140.50, which may be acting as an upside resistance point. A break above here would see 141.16 come into view, the 50% retracement for the reversal off the early July high. Any return lower would open 136.57, the lower band of a moving average envelope.
  • The USD saw a broader rebound on the back of higher yields post the stronger jobless claims data. The US-Japan 10yr swap spread continues to recover from the +280bps region.
  • The main focus today will be on June National CPI prints. The market looks for a steady 3.2% y/y on the headline, while ex fresh food is expected to nudge up to 3.3% y/y (from 3.2%), while the ex fresh food, energy measure is expected at 4.2% y/y (from 4.3% prior).
  • Still, expectations for next Friday's BoJ meeting are fairly low in terms of any potential policy tweaks. An ex Japan Finance Ministry official stated it would be a major surprise if Ueda moved next week given his recent rhetoric (see this link).

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