USD/JPY Pulls Back, But Bulls Still In Control, Yen Weakest G10 FX In Past Week

USD/JPY tracked lower post the Asia close on Thursday but found support sub the 161.00 level (which was still above intra-session lows from Wednesday, 160.78). We track near 161.25/30 in early Friday dealings, after a yen gain of 0.25% for Thursday's session, which was in line with broader USD Index losses (both BBDXY and DXY off around 0.25% in holiday impacted trade).

• Little has changed in terms of the USD/JPY technical backdrop, bulls remain in the drivers seat. The July 3 high rests at 161.95, while 162.21 is an upside projection level. The 160.26 level is the June 28 low, while the 20-day EMA rests at 159.32.
• The JPY, along with the CHF, are the only two G10 currencies that are weaker against the USD over the past week. Broader risk appetite has improved, with EU equities higher in Thursday trade. Polls suggest Le Pen's party will struggle for an absolute majority at this Sunday's conclusion of the legislative elections. EUR/JPY tracks near 174.30 in early Friday dealings, recent highs rest around 174.50.
• The broader equity risk tone, coupled with a generally positive commodity price backdrop, has worked to offset any positive yen momentum from lower US yields/a weaker US growth outlook (following this week's data outcomes in the US).
• Today locally we have May household spending first up, (0.3% y/y is projected, versus 0.5% prior) Later on May preliminary leading and coincident indices are out.