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JPY: USD/JPY Dips Under 147.00 Amid Equity Weakness, PM Ishiba Backs Pay Rises

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Yen gained a little over 0.50% for Monday's session USD/JPY got to fresh multi month lows of 146.64 on Monday before finding some support. The pair tracks near 147.15/20 in early Tuesday dealings, as markets digest the sharp US equity falls from Monday amid continuing growth concerns. Yen, along with NOK, were the only two currencies to rise against the USD for Monday's session. 

  • The trend needle in USD/JPY continues to point south. Monday's sell-off has resulted in a breach of 146.95, 61.8% of the Sep 16 ‘24 - Jan 10 bull leg. Sights are on 145.92, the Oct 4 2024 low. Key short-term resistance is 151.30, the Mar 3 high. Clearance of this level is required to signal a base.
  • The sharp falls in US equities, the SPX lost 2.70%, the Nasdaq down 4.00% sub 17500, to multi month lows, aided yen outperformance. Safe haven demand for US Tsys also saw a sharp move down in yields, with 6-12bps moves lower, led by the front end. This is driving US-JP yield differentials lower, but JGB yields are likely to play some catch up today to the downside.
  • Late yesterday, Japan's PM Ishiba pushed companies and unions to achieve strong wage gains this year (see this BBG link). This follows the Rengo pay tally from last week - underlining pay demands at their highest level in over 30 years for the 2025 Shunto round (+6%). While the March BoJ decision sees little chance of a rate hike - the May 1st meeting could be more consequential, for which the decision could be contingent on the Tankan survey on April 1, reports from the Bank's branch managers' meeting on April 7, the updated Rengo tally in April, and CPI.
  • Today on the data front we have Jan household spending (+3.7%y/y rise forecast versus 2.7% prior), along Q4 GDP revisions. The market isn't forecasting any shifts to the initial print of 0.7%q/q.
  • Note in the following in the option expiry space as well for NY cut later: Y146.45-65($1.0bln), Y148.70($543mln). 
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Yen gained a little over 0.50% for Monday's session USD/JPY got to fresh multi month lows of 146.64 on Monday before finding some support. The pair tracks near 147.15/20 in early Tuesday dealings, as markets digest the sharp US equity falls from Monday amid continuing growth concerns. Yen, along with NOK, were the only two currencies to rise against the USD for Monday's session. 

  • The trend needle in USD/JPY continues to point south. Monday's sell-off has resulted in a breach of 146.95, 61.8% of the Sep 16 ‘24 - Jan 10 bull leg. Sights are on 145.92, the Oct 4 2024 low. Key short-term resistance is 151.30, the Mar 3 high. Clearance of this level is required to signal a base.
  • The sharp falls in US equities, the SPX lost 2.70%, the Nasdaq down 4.00% sub 17500, to multi month lows, aided yen outperformance. Safe haven demand for US Tsys also saw a sharp move down in yields, with 6-12bps moves lower, led by the front end. This is driving US-JP yield differentials lower, but JGB yields are likely to play some catch up today to the downside.
  • Late yesterday, Japan's PM Ishiba pushed companies and unions to achieve strong wage gains this year (see this BBG link). This follows the Rengo pay tally from last week - underlining pay demands at their highest level in over 30 years for the 2025 Shunto round (+6%). While the March BoJ decision sees little chance of a rate hike - the May 1st meeting could be more consequential, for which the decision could be contingent on the Tankan survey on April 1, reports from the Bank's branch managers' meeting on April 7, the updated Rengo tally in April, and CPI.
  • Today on the data front we have Jan household spending (+3.7%y/y rise forecast versus 2.7% prior), along Q4 GDP revisions. The market isn't forecasting any shifts to the initial print of 0.7%q/q.
  • Note in the following in the option expiry space as well for NY cut later: Y146.45-65($1.0bln), Y148.70($543mln).