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USD/JPY Rebounds Strongly On Higher US Yields, BoJ Bond Buying Ops In Focus

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USD/JPY staged an impressive near 200pip rebound from early Thursday lows of 153.60 to 155.50/55 by the US session on Thursday. We track near 155.35/40 in early Friday dealings, after losing 0.33% for Thursday's session.

  • Yen was weighed by a rebound in US yields. Cautious comments from the Fed's Mester around the Fed achieving its Fed target, saw rate cut expectations pared. US data was mixed.
  • Tsy yields recouped some Wednesday's losses, although more so at the front end, (2yr +7bps to 4.795%, 10yr to 4.375%, up 3.5bps).
  • For USD/JPY, upside focus rests at 156.74, the May 14 high and 157.00, a Fibonacci retracement. On the downside the 20-day EMA is nearby around 155.00, while the 50-day sits further south at 153.27.
  • Locally, the data calendar is quiet today, although we do have BoJ bond buying ops this morning. Earlier this week the BoJ scaled back purchases in the 5-10yr tenor, so this will likely draw some focus.
  • A former BoJ chief economist also noted the BoJ may raise rates as soon as June, per Bloomberg (see this link for more details).
  • Finally note the following option expiries for NY cut later: Y153.80-00($1.4bln), Y155.00($1.7bln), Y155.50-60($819mln), Y156.00($542mln).
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USD/JPY staged an impressive near 200pip rebound from early Thursday lows of 153.60 to 155.50/55 by the US session on Thursday. We track near 155.35/40 in early Friday dealings, after losing 0.33% for Thursday's session.

  • Yen was weighed by a rebound in US yields. Cautious comments from the Fed's Mester around the Fed achieving its Fed target, saw rate cut expectations pared. US data was mixed.
  • Tsy yields recouped some Wednesday's losses, although more so at the front end, (2yr +7bps to 4.795%, 10yr to 4.375%, up 3.5bps).
  • For USD/JPY, upside focus rests at 156.74, the May 14 high and 157.00, a Fibonacci retracement. On the downside the 20-day EMA is nearby around 155.00, while the 50-day sits further south at 153.27.
  • Locally, the data calendar is quiet today, although we do have BoJ bond buying ops this morning. Earlier this week the BoJ scaled back purchases in the 5-10yr tenor, so this will likely draw some focus.
  • A former BoJ chief economist also noted the BoJ may raise rates as soon as June, per Bloomberg (see this link for more details).
  • Finally note the following option expiries for NY cut later: Y153.80-00($1.4bln), Y155.00($1.7bln), Y155.50-60($819mln), Y156.00($542mln).