USD/JPY Rebounds From Weekly Lows

After hitting fresh lows for the week earlier (138.76), USD/JPY is comfortably higher, last in the 139.20/30 region. We are around 0.25% weaker in yen terms versus NY closing levels. For now the pair has backed away from a test of the 20-EMA (just under 138.65).

• USD FX indices are tracking a touch higher, after Thursday's sharp pullback. US yields are a touch higher, aiding this modest bid and likely weighing on yen at the margins (7yr leads the way up 1.5bps, 2yr +0.6bps to 4.52%).
• Earlier comments from BoJ Governor Ueda noted that the central bank is seeing some change in corporate price-setting behavior that is working to push up inflation, with this year's strong wage negotiation outcomes complementing this move. Ueda stated various data will be factored in when the BoJ updates its quarterly forecasts in July (in Apr the central bank forecast inflation to slow in the second half of this fiscal year).
• Elsewhere Ueda stated the central bank will patiently maintain current easing and that they are still some distance to the price target. All in all these comments don't suggest any surprise policy shifts next Friday.
• JGB futures are up from session lows, while 10yr swap rates hold around 0.60%.