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Yen Edges Higher After Thursday's Sell-Off

JPY
BulletMarketsForeign ExchangeBank of Japan (BOJ) Market News

USD/JPY went offered Thursday as risk appetite soured, with China's prolonged battle against its COVID-19 outbreak working against market sentiment. Above-forecast U.S. inflation data released earlier this week played into this narrative, fuelling worries over the global growth outlook. The yen finished the day as the best G10 performer.

  • USD/JPY implied volatilities staged firm rebounds on Thursday, while 3-month 25 delta risk reversal extended its recent dip below the breakeven level.
  • Spot USD/JPY trades at Y128.54, up 20 pips on the day. The technical outlook remains bullish, with initial focus on May 9 high of Y131.35. Bears look for renewed losses past key support from Apr 27 low of Y126.95.
  • The local data docket is virtually non-existent today. Focus turns to next week's PPI & flash machine tool orders (Monday), preliminary GDP figures & final industrial output (Wednesday), trade balance & core machine orders (Thursday) as well as national CPI (Friday).
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USD/JPY went offered Thursday as risk appetite soured, with China's prolonged battle against its COVID-19 outbreak working against market sentiment. Above-forecast U.S. inflation data released earlier this week played into this narrative, fuelling worries over the global growth outlook. The yen finished the day as the best G10 performer.

  • USD/JPY implied volatilities staged firm rebounds on Thursday, while 3-month 25 delta risk reversal extended its recent dip below the breakeven level.
  • Spot USD/JPY trades at Y128.54, up 20 pips on the day. The technical outlook remains bullish, with initial focus on May 9 high of Y131.35. Bears look for renewed losses past key support from Apr 27 low of Y126.95.
  • The local data docket is virtually non-existent today. Focus turns to next week's PPI & flash machine tool orders (Monday), preliminary GDP figures & final industrial output (Wednesday), trade balance & core machine orders (Thursday) as well as national CPI (Friday).