USD/JPY Trend Structure Remains Bearish, August PMIs Print Today

After pushing above 146.00 late in Wednesday Asia Pac trade, USD/JPY spent most of the offshore session tracking lower. We got to 144.46 in late US trade before recovering some ground, the pair near 145.20 in early Thursday dealings. These moves left the pair close to unchanged for Wednesday's session. The BBDXY index was near flat at 1230, but the DXY fell 0.30% due in part to EUR and GBP gains.

• As expected, the July FOMC minutes signalled that participants were eyeing a cut in September, with "several" seeing it as "plausible" to cut already in July. The weighed on the USD, with the DXY hitting fresh lows sub 101.00 before losses were pared into the US close. This also coincided with USD/JPY's dip sub 145.00.
• The BLS prelim annual payrolls benchmark saw a downward revision of 818k jobs to the Mar'24 statistics. It implies seasonally adjusted average monthly payrolls growth through the twelve months to Mar 2024 was closer to 174k rather than 242k seen in the current vintage.
• US Tsys yields finished mostly lower across the key benchmarks, led by the front end, the 2yr off 5bps to 3.93%. US-JP yield differentials remain skewed lower, although are above recent lows for the 2yr and 10yr spread tenors.
• For USD/JPY technicals, the trend structure remains bearish. Support at 144.29 is eyed, beyond that is the 141.70 level (Aug 5 low). 149.06 is the 20-day EMA on the topside.
• The data calendar has offshore weekly investment flows today, along with the August preliminary PMIs out today.
• In the option expiry space note the following for NY cut later: Y145.70($1.2bln), Y146.20($1.1bln), Y148.00($1.1bln), Y148.65($1.5bln).