USD/JPY holds steady at Y108.87 before...>

DOLLAR-YEN: USD/JPY holds steady at Y108.87 before the release of Japanese PPI

later today. The Nikkei 225 futures are pointing to a flat open.

- Renewed USD strength lent support to the pair on Tuesday, but not enough for

Y109.00 to give way. Nonetheless, USD/JPY eked out 13 pips worth of gains at the

end of the day after topping out at the best level since the last day of May.

- The initial layer of resistance is provided by the 38.2% retracement of

Y112.40-Y106.78 & the 50-DMA, both at Y108.93. A move through the level and

further, through the Y109.00 mark, would open the 55-DMA & upper 1.0% 10-DMA

envelope at Y109.22. Bears look for a dip below a series of recent highs

clustered within Y108.62-72.

- South Korean Industry Min Sung said that envoys from his country and from

Japan will meet on Friday to discuss the ongoing bilateral trade spat (the

details of which we highlighted in previous bullets).

- Friday will see the release of final Japanese industrial output, as well as

1-25+ Year BoJ Rinban ops.