USD/JPY Volatility Firms As Spot Close To 160.00

USD/JPY sits near 159.60 in early Tuesday trade, slightly off earlier Monday highs of 159.92. The pair did see a brief sharp dip to 158.82 on seemingly no news late in Asia Pac trade on Monday. No doubt intervention fears are more heightened as the pair is close to late April highs of 160.17.

• Yen gains were a modest 0.11% for Monday's session, towards the bottom end of relative G10 performance for the session, (the BBDXY fell nearly 0.30%), with all majors up against the USD.
• US yields were slightly lower at the back end of the curve, likely weighing on the USD at the margins, although Fed speak was still cautious around the inflation backdrop. Equity sentiment was mixed with EU markets higher, but US markets were mostly lower.
• For USD/JPY near term focus will rest on intervention risks from the authorities. Yesterday, Japan’s top currency official Masato Kanda said they remain ready to act around the clock.
• On the data front today the PPI services prints for May this morning, followed by the April leading and coincident indices. Also out is the final May machine tool orders print.
• In the option expiry space, note the following for NY cut later: Y158.75($530mln), Y160.00($1.3bln).