Yen Volatility Subsides, USD/JPY Remains Near Cycle Highs

USD/JPY charted a Doji candlestick on Monday, as Japanese officials fired another warning shot on yen weakness, but resultant reprieve for the currency dissipated amid reduced demand for safe havens.

• On that official communique, PM Kishida and BoJ Gov Kuroda closed ranks on FX matters, with the Premier noting that Kuroda expressed concern over yen moves during their meeting on Monday. Meanwhile, the central bank chief noted that Kishida did not make any particular comments during as they spoke.
• The two officials met after the BoJ decided to cling onto its ultra-loose monetary policy settings last Friday, in defiance of the tightening campaign led by most major central banks across the globe, amplifying headwinds for the yen.
• Spot USD/JPY still operates near multi-decade highs, last at Y135.07. A break above Jun 15 high of Y135.59 would shift focus to the 1.382 proj of the Feb 24 - Mar 28 - 31 price swing at Y136.04. On the downside, initial key support is located at Y131.50, which represents the low print of Jun 16.
• On the data front, the next release of note will be the monthly CPI report, due Friday. In the meantime, the BoJ will publish the minutes from its April monetary policy meeting on Wednesday.