USD/JPY Near Initial Resistance

USD/JPY is 10 pips higher on the day as we move towards European hours, dealing at best levels, just shy of the Y110.40 mark after sticking to a meagre sub-15 pip range in Tokyo. The uptick was aided by U.S. Tsys unwinding their modest early richening.

• The yen looked through local Japanese data releases (with Q2, F GDP and monthly BoP providing the tier 1 reference points in today's data).
• Japanese political matters remained at the fore, although didn't trigger any notable market reaction. Headlining on that side of things was one of the more notable candidates in the race to become leader of the ruling LDP Party, Fumio Kishida, who reiterated his desire to deploy a spending package worth tens of trillion yen, a need to retain bold monetary easing policies and a want to rethink taxation on financial income. All in all, there was no fresh notable information in the address, with the central tenants of Kishida's ideals surrounding these matters already known, and no pressing need for notable tax overhauls observed e.g. consumption tax.
• Our technical analyst notes that the pair still appears vulnerable to downward pressure despite recent gains. Initial resistance is nearby in the form of the Sep 1 & Aug 13 highs (Y110.42/46), with key resistance located above at the August 11 high (Y110.80). A break there would open the way the Jul 2 high/bull trigger (Y111.66). Initial support is seen at the Aug 31 and Sep 3 low, followed by the Aug 24 low (Y109.59/41).
• There is nothing in the way of notable option expiries to be concerned with re: the pair come today's 10AM NY cut.