USD/JPY Rebounds From Monday Lows, But Trend Structure Remains Bearish

USD/JPY tracks near 144.50/55 in early Tuesday dealings, more than 100pips up from intra-session lows on Monday. Broader USD sentiment recovered some ground as the Monday session unfolded, albeit with lighter liquidity conditions due to the UK holiday. The BBDXY USD index finished 0.28% higher, the DXY +0.16%.

• US yields finished marginally higher for Monday trade, with some the key Tsy benchmarks up +2bps. Comments San Francisco Fed head Daly largely echoed those of Chair Powell, that now is the time to start cutting rates, although there appeared to be some caution over the pace/size of cuts.
• This may have lent some support to US yields and in turn the USD. The Dallas Fed manufacturing survey also printed stronger than forecast.
• The equity backdrop was weaker in US markets, led by the tech side (Nasdaq off 0.85%). This comes ahead of earnings for tech bellwether Nvidia later this week.
• The Yen didn't receive much safe haven demand as equity sentiment pulled back, although it did outperform most higher beta plays. Yen lost 0.11% for Monday's session (NZD fell 0.47%, AUD down 0.34%).
• In terms of technicals, USD/JPY’s trend structure is bearish and moving average studies remain in a bear-mode set-up. A stronger reversal lower would refocus attention on key support at 141.70, the Aug 5 low.
• Today on the data front we have the PPI services print for July. The market projection is 2.9% y/y, versus 3.0% prior.