Yen Underperforms USD Pullback, PMIs On Tap Today

Yen underperformed the broader USD pull back post the Asia close on Monday. From highs near 150.00 we got back to 149.55 late in NY trade before some support emerged. The pair closed at 149.71 (+0.10% gain in yen terms) and sits close to this level in the first part of Tuesday trade.

• Monday's modest USD/JPY pull back didn't alter the positive technical set up for the pair. Moving average studies are in a bull mode set-up, with attention on the 150.00 handle and the recent 150.16 high (Oct 3). On the downside, a breach of 147.43, Oct 3 low, would mark an important bearish development. Before that the 20-day EMA comes in 149.16.
• US yields pulled away from recent highs in Monday trade post the Asia close. The 10yr yield rejecting the 5.0% level break and pulling back sharply (closing at 4.85%, -6.3bps).
• This benefited the yen, but a better equity market tone, particularly in EU markets (US markets were more mixed), likely curbed performance relative to higher beta crosses.
• On the data front today we have the preliminary PMI prints for October first up. Later on, September Department store sales are due.