Yen Pares Most Post CPI Gains, As US Yields Firm

USD/JPY initially tracked lower post the Asia close, getting to 150.08 by NY trade, with some positive spill over for the yen from yesterday's stronger local CPI data. However, from there we rebounded back towards 150.50/60 by late in the session. We track near 150.50 in early trade on Wednesday.

• The recovery in USD/JPY coincided with a firmer US yield backdrop in US trade. The 10yr pushing back above 4.30%, up around 2.5bps for Tuesday's session.
• US data was mixed, while month end extensions, plus a firmer equity market backdrop were cited are factors pushing yields higher.
• For Yen, it was the top performer in the G10 space for Tuesday trade, albeit at the margin. We gained 0.14%, but overall trends were muted for the USD. The BBDXY close to steady near 1241.6.
• For USD/JPY, the bullish technical backdrop is unchanged. A resumption of the trend would pave the way for a climb towards 151.91/95, the Nov 13 ‘23 high and the Oct 1 ‘22 high and major resistance. On the downside, initial firm support lies at 149.41, the 20-day EMA. A break would signal scope for a correction towards 148.01, the 50-day EMA.
• Today, we just have Dec F readings for the leading and coincident indices, which is unlikely to shift sentiment.