USD/JPY Rebounds With US Yields, Tokyo CPI On Tap Today

Yen lost nearly 0.70% in Thursday trade, mid range from a G10 standpoint, with EUR and CAD seeing less weakness. AUD and NZD fell by more though against the USD. For USD/JPY we continued to climb post the Asia close, albeit unable to get back above the 146.00 level. We currently track around the 145.80/85 region.

• Wednesday lows in USD/JPY came in around 144.50, while earlier highs in the week were ~146.60. The recent pullback is considered corrective in the pair. MA studies are in a bull mode condition, highlighting an uptrend. The focus is on 147.49, a Fibonacci projection. Support is at 144.24, the 20-day EMA.
• The firmer US yield backdrop through Thursday's session supported USD/JPY, as it did broader USD sentiment. Yield gains across the curve were 3-6bps, although outright yield levels remain sub recent highs. Some Fed speak hinted at the need for higher for longer rates, although we have Fed Chair speaking at Jackson Hole later today during the US session.
• The weaker US equity tone helped yen outperform on some crosses. AUD/JPY eased back to 93.55/60, versus earlier Thursday highs near 94.20.
• China suspended seafood imports from Japan in response to the release of treated wastewater from the Fukushima nuclear plant. Such exports total nearly $500mn per year from Japan to China.
• On the data front today, the main focus will be on Tokyo CPI for August. The market looks for headline at 3.0%y/y (prior 3.2%), while core ex fresh food is projected at 2.9% y/y, versus 3.0% prior. The core measure, which also strips out energy, is forecast at steady, 4.0%. y/y.