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USD/JPY Holding Sub 154.00, Yen Short Positions Cut

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USD/JPY finished Friday trade little changed, sitting in the 153.75/80 region, which is where we track in early Monday dealings. On the topside we couldn't extend beyond 154.75, while a dip to 153.15 was supported. For last week, yen was comfortably the best G10 FX performer, up 2.11%.

  • For USD/JPY recent lows at 151.94 remain intact, while the July 24 high (155.99) should act as an upside resistance point.
  • Friday saw US PCE data came and went with little long-lasting market consequence. PCE price indices were generally inline with expectations, although modest weakness was noted in the personal income category.
  • US yields finished lower across the key benchmarks, around -3-6bps, which helped cap the upside in USD/JPY. US-JP yield differentials have seen more downside for the 2yr tenor (last around +398bps), with Fed easing expectations driving sentiment in this space.
  • Yen short positions were scaled back per the CFTC report, with net commercial shorts now at -107k, up nearly +44k from the prior week. Net shorts are now back towards late March levels.
  • Today the data calendar is empty, but we have BoJ bond buying ops. The MoF reportedly wants the central bank to consider banks' ability to hold bonds in a determining how much to curbs its bond buying program by (see this BBG link).
  • In the option expiry space, note the following for NY cut later: Y153.25-30($1.0bln), Y154.00($1.3bln), Y155.85($586mln), Y156.50($2.4bln).
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USD/JPY finished Friday trade little changed, sitting in the 153.75/80 region, which is where we track in early Monday dealings. On the topside we couldn't extend beyond 154.75, while a dip to 153.15 was supported. For last week, yen was comfortably the best G10 FX performer, up 2.11%.

  • For USD/JPY recent lows at 151.94 remain intact, while the July 24 high (155.99) should act as an upside resistance point.
  • Friday saw US PCE data came and went with little long-lasting market consequence. PCE price indices were generally inline with expectations, although modest weakness was noted in the personal income category.
  • US yields finished lower across the key benchmarks, around -3-6bps, which helped cap the upside in USD/JPY. US-JP yield differentials have seen more downside for the 2yr tenor (last around +398bps), with Fed easing expectations driving sentiment in this space.
  • Yen short positions were scaled back per the CFTC report, with net commercial shorts now at -107k, up nearly +44k from the prior week. Net shorts are now back towards late March levels.
  • Today the data calendar is empty, but we have BoJ bond buying ops. The MoF reportedly wants the central bank to consider banks' ability to hold bonds in a determining how much to curbs its bond buying program by (see this BBG link).
  • In the option expiry space, note the following for NY cut later: Y153.25-30($1.0bln), Y154.00($1.3bln), Y155.85($586mln), Y156.50($2.4bln).