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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
JPY
Even amidst a positive risk backdrop on Monday's session, USD/JPY still spent most of the post Asia close tracking lower. There was some support ahead of the 148.10 level, which we couldn't breach to the downside during the NY session. USD/JPY was last near 148.40, a gain of just over 0.80% for Monday's session (second best in the G10 space behind NOK).
- In terms of techs, support at the 50-day EMA, at 149.19, has been cleared. The clear break of this EMA strengthens a short-term bearish theme and signals scope for a deeper correction, towards 147.43, the Oct 3 low. On the topside, the 20-EMA is near 150.23.
- Broadly softer USD sentiment aided the continued yen rebound, while positioning may have also been a factor, given up to last Tuesday leveraged funds had increased yen shorts.
- US yields were relatively steady through Monday trade. US-JP 10yr yield differentials have drifted sideways, last around +367bps, although visually at least, there is still some room to catch up on the downside, see the chart below.
- The local data calendar is empty today.
- The latest insight from the MNI policy team in Tokyo suggests the BOJ needs to see signs of positive wages growth to confirm a turn in the wage-price cycle (see this link for details).
Fig 1: USD/JPY Versus US-JP 10yr Yield Differential
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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