USD/JPY Sits Just Below 2023 Highs, Ueda Says Weakening Inflation Justifies Easing

USD/JPY was volatile post the Asia close on Friday. Dips were supported sub 146.00 and we got to fresh highs for 2023 of 146.60/65 before edging lower into the NY close. We track in the 146.40/45 region in early trade today, with yen having lost 0.42% for Friday's session. The currency was the second worst performer in the G10 space for the session.

• Yen was volatile as Fed Chair Powell spoke at Jackson Hole, but the firmer tone to US front yields (+5.5bps for the 2yr to 5.08%), aided USD sentiment at the margins.
• Chair Powell didn't provide much fresh inflation for markets, while on Saturday at Jackson Hole, BoJ Governor Ueda stated that lower inflation projections into year-end (CPI ex fresh -food, which is currently running at 3.1% y/y) continues to warrant an easing stance (see this link for more details).
• Overall, the uptrend in USDJPY remains intact and the latest pullback appears to have been a correction. Moving average studies are in a bull mode condition, highlighting an uptrend. The focus above will be on 147.49, a Fibonacci projection. Support to watch moves up to 144.39, the 20-day EMA.• On the data front today, the final June leading and coincident indices will print.
• Elsewhere, a government coalition member has postponed a planned trip to China (at China's request), which follows the release of treated wastewater from the Fukushima nuclear power plant (see this link).