USD/JPY Supported On Dips, Remains Near Cyclical Highs, PPI Out Today

USD/JPY pulled back from near cyclical highs post the Asia close on Tuesday. We fell back to 151.57 before support emerged. Supports for the yen came from the equity pull back at the US open, along with lower US yields. Still, the pair remains comfortably within recent ranges. We track in the 151.75/80 in early Wednesday trade, after being little changed for Tuesday's session in aggregate.

• On the data today we have the Mar PPI on tap, along with bank lending figures. The PPI is projected to be marginally firmer at 0.8% y/y, versus 0.6% prior.
• The yen’s sensitivity to major US data points has remained a key theme for global markets in recent months, with the CPI out later in the US session (along with the FOMC Mins).
• However, USDJPY’s proximity to multi-decade resistance and the potential threat of MOF intervention is placing the Yen’s tradability into question at current levels.
• We highlight some key topside levels for USD/JPY and the crosses ahead of the US CPI release and the potential downside targets should market sentiment prompt a yen recovery, see this link for more details.
• Note the following option expiries for NY cut later today: Y149.00($700mln), Y149.50($607mln), Y151.00-20($638mln), Y151.50($816mln), Y151.90-10($609mln).
• Late yesterday it was reported the BoJ may raise its inflation forecast at its next policy meeting given the strong wage outcomes recorded recently (see this BBG link for more details).