USD/JPY Near 157.00 Ahead Of BoJ, EUR/JPY Lower On EU Asset Weakness

USD/JPY tracks around 157.00 in early Friday trade. The yen lost a modest 0.20% for Thursday's session, outperforming most of the G10 particularly EU related currencies. Euro area assets were under pressure amid on-going political concerns. USD/JPY did see a brief dip to just under 156.60 post US misses (PPI and initial jobless claims) but we quickly reversed higher.

• All focus today will be on the BoJ decision. Focus rests on potential curbs to the BoJ bond buying program, with other policy parameters seen unchanged (see our preview here). Regardless of the decision at this week’s meeting, we expect the BoJ to proceed cautiously and gradually in both hiking the policy rate and adjusting JGB purchases.
• We also have the April tertiary activity index out today, along with the final April Industrial production read.
• Broader tech levels for USD/JPY remain unchanged. Upside focus is on 157.71, the May 29 high. The 50-day EMA is just above 155.00 on the downside.
• EUR/JPY mostly tracked lower through Thursday trade after the Asia close. We got to just under 168.30, which also coincided with lows earlier in the week. We are slightly higher now, last around 168.60 (after the pair fell 0.50% for Thursday's session).
• In the option expiry space, note the following for NY cut later: Y154.00($1.1bln).