USD/JPY Near 156.00, PM Kishida Vows Close Coordination With BoJ On FX

USD/JPY starts the week near 155.70, slightly sub highs from late last week. We spent most of the post Asia close on Friday firming, but weren't able to breach the 156.00 level. Yen lost around 0.20% for Friday's session as the USD recovered some ground into the end of the week.

• Yen was comfortably the worst G10 performer last week, losing 1.75% against the USD, as the market bought dips in USD/JPY post the prior week's intervention induced pullback.
• Technically, gains are considered correction following the sharp retracement from above 160.00. 156.28, the May 2 high, is the near term upside focus. The 20-day EMA is at 154.46, while 151.65 is trendline support drawn from the Dec 28 low.
• The USD was supported, albeit modestly, post the University of Michigan sentiment release on Friday. While headline sentiment missed expectations and pointed to a deteriorating consumer, inflation expectations firmed - the one-year inflation expectation metric rose to 3.5% from 3.2%, the highest since late 2023. US yields finished higher across the benchmarks, with the front end slightly firmer (US 2yr to 4.87%, +5bps).
• The local data calendar just has Apr money stock figures on tap today. In the option expiry space note the following for NY cut later: Y155.00-15($2.4bln), Y157.45-50($1.4bln), Y157.65($901mln)
• From Friday, onshore media noted that PM Kishida is closely monitoring FX developments and that the government and the BoJ will work closely together (per NHK, see this link).