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USD/JPY Remains Pinned to Daily Lows

JPY
  • The pullback in the USD persists in recent trade, keeping USD/JPY pinned to the earlier session lows of 144.66. The currency seemingly taking the lead from Treasuries, as the 10y yield retreats - aided by the soft prelim PMI numbers, although didn't mark the initial trigger.
  • 144.36 marks first support (23.6% retracement for the Jul - Aug upleg) ahead of 143.00 and the 50-dma of 142.66.
  • As noted above, OIS-implied Fed pricing has retreated today alongside UK/Eurozone counterparts, putting through further weight in the currency. JPY is now the strongest in G10, with GBP the weakest.
  • Ebbing US yields relieving some pressure on equity markets, helping e-mini S&P recover above the overnight highs despite a number of high profile names (Peloton, Foot Locker) posting significant intraday losses Wednesday.

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