USD/JPY Maintains Recent Ranges, More BoJ Speak On Tap Today

USD/JPY saw support ahead of 147.00 late in Asia Pac trade yesterday. We drifted higher post the close but didn't get beyond 147.75 late in NY trade. We currently sit slightly lower, last near 147.60, similar to end Tuesday levels in NY.

• Technically, focus remains on upside momentum in the pair, with 148.40 the Nov 4 2022 high eyed as the next upside target. On the downside, the 20-day EMA sits at 145.52, while the Sep 1 low at 144.45 is a key support point.
• A firmer US yield backdrop helped keep USD/JPY dips supported. This was underpinned by the better than expected ISM services print. More gains in yields were evident at the front end, although the US-JP 10yr swap spread has pushed above +310bps in recent sessions.
• Working the other way to support the yen was a weaker equity tone, with the major indices tracking lower in US/EU trade. The other factor mindful for the market was yesterday's step up in verbal rhetoric around FX from Japan currency chief Kanda (won't rule out any option if current trends continue).
• On the data front today, we have weekly investment flows, along with Tokyo August office vacancies and the July preliminary leading and coincident indices. The BoJ's Nakagawa also speaks.
• The Japan Government is reportedly formulating economic measures to be released in October, with a focus on raising wages and easing cost of living pressures (see this link).