USD/JPY's Decline Halted By Firmer US Data/Higher US TSY Yields

USD/JPY sunk to 146.66 post the Asia close on Wednesday. A stronger local yield backdrop into yesterday's close, as markets reassess the timing around the BoJ shift from negative rates, coupled with broadly weaker USD sentiment, drove the move.

• We recovered ground through US trade, as better data drove higher US Tsy yields. The pair tracks around 147.55 in early Thursday trade, still +0.50% firmer in yen terms.
• In terms of downside levels in USD/JPY, key short-term support has been defined at 144.36, the Jan 12 low and clearance of this level would be required to signal a top. The Jan 19 high at 148.80 is defined as topside resistance.
• Focus today will be on local fixed income, although early trends are likely to reflect catch up with US moves to a degree. Headlines also crossed late yesterday around local unions calling for wage hikes this year (see this BBG link).
• The local data calendar has weekly investment flow data, along with department store sales and machine tool orders.
• In the FX option expiry space note the following for NY cut later: Y146.50-60($570mln), Y147.55-65 ($617mln).