USD/JPY Roundtrips On Monday

Monday saw USD/JPY operate within the confines of the range witnessed at the backend of last week, unwinding a couple of shifts lower in the rate in the process. The fact that the long end of the U.S. Tsy curve cheapened allowed a base to form, even as U.S. equities held lower. Note that e-minis and the Nikkei 225 are better bid in early Asia-Pac trade, aided by reports suggesting that U.S. Democratic Senator Manchin & President Biden may reconvene in the new year to discuss Biden’s BBB plan. The rate last deals a handful of pips higher on the day as a result, printing at Y113.65.

• In terms of local Japanese news, press reports have pointed to the potential for a government upgrade re: its FY22 real GDP growth view to 3.0%+ (currently 2.2%), owing to the impact of the well-documented fiscal support package that has been outlined and in recent weeks (formally enacted on Monday).
• Tuesday’s Asia-Pac docket doesn’t contain any tier 1 risk events.
• Initial USD/JPY technical lines in the sand are as follows:
• Resistance comes in at the Dec 15 high/61.8% of the Nov 24-30 downleg (Y114.26/38)
• Support is seen at the Dec 17 low (Y113.14)