USD/JPY Technical Backdrop Is Still Bullish, Holding Above 150.00

USD/JPY stuck to recent ranges through Friday dealing. Most of the volatility came after the stronger than expected US PPI print, with the pair rallying to 150.60/65, but we had pulled back to 150.10 by late in NY trade. We track near 150.15/20 in early Monday trade this morning.

• Yen was the weakest performer through Friday's session in the G10 space, down nearly 0.20%, while the BBDXY was close to flat for the session (near 1244). Overall moves were contained though.
• For USD/JPY on the downside, 148.43 and 147.26 the 20 and 50-day EMAs respectively are key levels. On the top side, 151.91/95, the Nov 13 ‘23 high and the Oct 1 ‘22 high, a major resistance point, are the focus points. The overall technical backdrop remains bullish.
• US-JP 10yr government yield differentials ended last week around 10bps firmer at +354bps (albeit off post CPI highs (+359bps).
• The local data calendar has core machine orders out today for Dec. In the option expiry space we have Y144.00($1.2bln), Y147.00-15($687mln), Y148.25-45($625mln), Y150.00($786mln) for NY cut later today.
• Local media highlighted the continued fall in PM Kishida's approval rating (see this link). The authorities are also considering extending a gasoline subsidy beyond April (see this link). Reuters noted that the BoJ is still set to end NIRP despite the recession in H2 2023 (see this link).