USD/JPY Holding Above 147.00, Trend Needle Still Pointing North

USD/JPY was volatile through the US CPI print, spiking higher on the slightly firmer than expected m/m core outcome. However, we ran out of momentum just shy of 147.75 and pulled back sub 147.20 in NY trade. We finished the session at 147.46, but sit a touch lower in early trade today. Yen slipped 0.26% for Wednesday's session. Broader USD indices held close to recent levels, the BBDXY remaining above 1250.0.

• The trend needle in USD/JPY still points north from a technical perspective. Focus remains on 148.40, the Nov 4 2022 high. On the downside, 144.45 represents the key short-term support, the Sep 1 low. A break of this level is required to highlight a short-term top.
• US yields finished lower on Wednesday amid volatile trade, although losses were more evident at the front end of the curve (US 2yr down 5bps to 4.97%). US-JP 10yr swap spreads sit off recent highs but are still above +300bps at this stage. USD/JPY looks a little elevated to these trends, although the divergence is not large by historical standards.
• Japan PM Kishida plans to announce a 'bold economic package' by the end of September, which comes after the recent cabinet reshuffle (see this link for more details).
• On the data front today, weekly investment flows are on tap, along with July machine orders, and July IP.