USDJPY Trading Slightly Higher, Stronger PPI Inflation In November

USDJPY finished Friday near its previous close. Today it started the session trading sideways around 136.60 but has now shifted higher and is trading around 136.75. USDJPY had begun to move up before the November PPI data, which came in higher than expected at 9.3% y/y.

• The low in USDJPY this session was 136.35 and hit a high of 136.88 soon after the PPI data but is now moving lower again. It is likely to trend down over the medium-term on a possible pivot at the BoJ and lower US yields. Technicals suggest that it remains in a bullish corrective cycle for now. To the upside look for 138.92, the 20-day moving average, on the downside a break of 133.63, the bear trigger, would resume the downtrend.
• Given the BoJ’s dovish monetary policy stance, and recent speculation surrounding a hawkish policy tweak, the upward surprise to November PPI may take on more importance than usual. November corporate goods prices (PPI) for October were revised up to 9.4% y/y from 9.1% which helped to boost November to 9.3% (bbg consensus 8.8%) and there was also a 0.6% monthly rise.
• EURJPY has been trading sideways this morning but AUDJPY is lower at 92.50 on aussie weakness.
• Later today there are machine tool orders for November. Last month they fell 5.5% y/y. The Q4 Tankan data prints on Wednesday.