Yen Outperforms Dollar Strength, But 150 Test Still Eyed

Yen lost 0.33% on Monday's session. Both it and the Swiss Franc saw the smallest drops against the USD for the session, which was marked by broad based dollar gains. For USD/JPY we didn't test the 150.00 level, but remain within striking distance. The pair last near 149.80 in early dealings today.

• In terms technicals, the focus remains very much on the upside for the pair. Attention is on the psychological 150.00 handle. A break of this barrier would reinforce bullish conditions. On the downside, initial firm support lies at 147.97, the 20-day EMA.
• Yen underperformed amid broad US yield gains, as the US government shutdown was avoided, while the ISM data was better than expected and suggested a resilient labor market backdrop ahead of this Friday's NFP data.
• Equity sentiment faltered amid in EU and US markets, which may have provided cross support for the safe havens.
• Amid strong Japan yield gains, US-JP 10yr swap spreads sit around recent highs. The focus is likely to be on whether the Japan 10yr swap rate can break above 1.00%. This may help slow USD/JPY's ascent, but focus will remain on any official response of a break above 150.00.
• On the data front today we have the September monetary base figures.