USD/JPY Sharply Lower On US Yield Collapse

Yen has rallied a further 1% so far today, comfortably the bets performer within the G10 space. This puts the pair back to 133.70. This comes after Friday's +0.80% gain for the yen. The pair is more than 300pips below highs from Friday's session near 137.00.

• USD/JPY is back sub all its key EMAs. The 200-day day sits near by at around 134.17.
• The yen is a clear winner from the sharp pullback in US yields, as the market contemplates what the fallout from the SVB collapse means for boarder Fed policy. The US 2yr yield has had its largest short term pull back since the GFC through Thursday-Friday of last week.
• The US-JP 10yr swap spread is now back sub +260bps, we were at +297bps at the start of March.
• These developments and yen's traditional safe haven characteristics are driving recent outperformance.
• In terms of the local data calendar, the BSI large manufacturing and all industry readings are out for Q1 today but are unlikely to shift market sentiment.