USD/JPY was well bid Monday and more.....>

DOLLAR-YEN: USD/JPY was well bid Monday and more than wiped out last week's

losses, clearing a key resistance at Y107.50 and extending gains past its 50-DMA

in the process. The yen underperformed from the off, as expectations of stronger

monetary action from the PBoC helped improve risk appetite. Topside momentum was

sustained later in the day as Fed members talked down potential for the use of

negative rates in the U.S., reviving demand for USD. In addition, sentiment was

aided by optimism surrounding the partial re-opening of some economies, with

Yomiuri reporting that Japan may drop 34 prefectures from the nationwide

lockdown ahead of schedule.

- The rate trades flat at Y107.67 as we type. Bulls look to take out Apr 16 & 17

highs of Y108.08, which would indicate a full reversal of the previously bearish

outlook. The next resistance levels intersects at Y108.59, Apr 10 high. Bears

look for a retreat under the 50-DMA at Y107.60, which would expose May 6 & 7

lows situated at Y105.99.

- Looking ahead: Japan's BoP data & Eco Watchers Survey are due tomorrow, flash

machine tool orders are due Thursday, while PPI comes out on Friday.