Yen's Bull Run Halts, Japan Markets Out Today

Yen continued to lose ground post the Asia close on Friday. USD/JPY got back above 139.00 before selling interest emerged. We closed in NY at 138.80 and we have tracked close to this level in early Asia Pac trade on Monday (last 138.75). Yen lost 0.54% on Friday against the USD, this first loss since July 5. Note Japan markets are closed today for a local holiday.

• Yen weakness was consistent with a broader USD consolidation, with the BBDXY up close to 0.20% for Friday's session. We also saw a decent US yield rebound, with the 2yr up 13.5bps to be back near 4.77%.
• This move was likely aided by the better than expected U. of Mich consumer sentiment index print (including higher inflation expectations).
• Despite Friday's USD/JPY bounce, the pair was still 2.4% lower for the last week, which was the strongest weekly yen gain since the middle of January. Yield differentials trended in JPY's favor last week amid generally tempering Fed expectations and heightened expectations of a potential YCC tweak by the BoJ at the end of this month. These trends reversed somewhat on Friday though.
• With local markets out today, there is no data due. The main focus this week is likely to be on the national CPI print on Friday.