Yen Holds Gains Against USD, But Towards The Bottom End Of Relative G10 Performance

USD/JPY stuck to recent ranges post the Asia close on Thursday. Moves above 149.00 were faded by the market, but we couldn't test sub 148.30 on the downside. The pair tracks near 148.50 in early Friday dealings. Yen rose 0.41% for Thursday's session, towards the bottom end of G10 performers (only outperforming NOK and CAD).

• Technically, the uptrend remains intact in USD/JPY. A clear break of the 150.00 handle would reinforce bullish conditions - the bull trigger is 150.16, the Oct 3 high. On the downside, clearance of 147.43 would be a bearish development and signal scope for a deeper retracement. The 20-day EMA is also nearby at 148.35.
• US-JP yield differentials continue to move off recent highs, the 10-yr swap differential back to around +336bps, versus earlier highs in the week of +346bps. Short term correlations (the past month) are still running high between this spread and USD/JPY, +84%.
• Fed speak was on the dovish side on Thursday ahead of the US non-farm payrolls print later.
• Today in Japan we have August nominal and real cash earnings. Household spending is also out. Later on, we get August preliminary leading and coincident indices.