Yen Weakens As Greenback Finds Footing

Local market participants return after the elongated weekend, the greenback remains on the front foot which has pushed USD/JPY higher, the pair last at 104.13 after reaching as high as 104.40 earlier in the session, the highest level since 10 December.

• The greenback has continued to strengthen, driven by higher real yields and political theatre in the US with US House Speaker Pelosi saying last night the House intends to bring impeachment action against Trump this week.
• Elsewhere, South Korean-Japanese relations have got some airtime in recent days, but there has been little in the way of meaningful escalation on that front.
• Trade data today from Japan showed November's surplus rose to JPY 616bn against JPY 474bn expected, but lower than the JPY 971 in October. Bank lending data was also released which showed bank lending excluding trusts rose 5.9% in December, in line with October.
• Other data released from the region today are the latest economy watchers survey and 3-25 Year BoJ Rinban ops.
• There are some $1.3bn options rolling off from 104.00-15 today.
• USDJPY maintains a firmer tone and has extended the recent climb of 102.59, Jan 6 low. The pair has cleared the 50-day EMA, strengthening current short-term bullish conditions. This resulted in prices briefly breaching key resistance at 104.38, the top of a bear channel drawn of the Mar 24 high. A channel break, if seen, would signal a stronger trend reversal. On the downside, 102.59 is the bear trigger. Initial support is at 103.53, the 20-day EMA