Yen Atop The G10 Pile

The richening in U.S. Tsys supported the JPY during Tokyo trade, leaving USD/JPY 40 pips lower into London dealing, with the rate hovering just above Y112.80 after printing as low as Y112.73. Regional worry re: Evergrande and pressure on the bonds of Chinese property developers may have added further weight to JPY crosses.

• Our technical analyst notes that USD/JPY has started the week on a softer note. Yesterday's move lower resulted in a break of support at the Oct 12 low (Y113.00). The breach of this support signals scope for a deeper pullback and opens the way to the Sep 30 high (Y112.08). This short-term sell-off is still considered corrective and is allowing a recent overbought condition to unwind. The trigger for a resumption of the uptrend is located at the Oct 20 high (Y114.70).
• The only round of option expiries to be concerned with come today's 10AM NY cut comes in the form of the $2.0bn rolling off with a Y113.70 strike, although that may prove to be a little too far away, unless there is a notable flip in the risk tone.
• A raft of central bank speak headlines the broader docket during Tuesday's session.