USD/JPY Off Post US Retail Sales Highs, But Yen Underperforms Most G10

USD/JPY got to highs of 158.86 after the US retail sales printed stronger than forecast in Tuesday US trade. However, there was no follow through and we track near 158.30/35 in early Wednesday dealings. Yen lost 0.18%, underperforming most of the G10 (AUD and NZD both lost around 0.40%, and were the worst performers).

• The BBDXY USD index ended close to flat for Tuesday's session (1251.76), highs above 1255, post the retail beat, not sustained. US yields finished lower across the benchmarks, the 2yr off 4bps, the 10yr down 7bps to 4.16%, unwinding some of Monday's curve steepening.
• For USD/JPY, the weaker yield backdrop trimmed gains, although we remain comfortably above intra-session lows from Monday (157.19).
• Also note, latest reports suggest that the Japanese government intervened to the tune of Y5.6trl across two phases last Thursday and Friday, in what appears to be a more tactical approach to strengthen the currency.
• Tech wise for USD/JPY - trend line support (158.49) was pierced in the recent pull back. Next support is 156.83, a Fibonacci retracement. For bulls, a reversal higher would refocus attention on key resistance and the bull trigger at 161.95, the Jul 3 high.
• Locally, the data calendar is empty today (trade figures tomorrow), Friday delivers the National CPI print for June. We do have BoJ Rinban operations today.