Yen Woes Continue

USD/JPY extended its surge Tuesday, hitting levels not seen in almost three years after a clean break above a descending trendline drawn off the Dec 1975 high. Tuesday's headline flow added little new to the familiar fundamental narrative, as energy prices continue to soar, while the BoJ are expected to keep monetary policy settings accommodative, even as most major central banks look to raise interest rates.

• Note that the RSI is in overbought territory, just. A pullback below the 70 threshold could herald a dissipation of fresh demand for the cross.
• USD/JPY 1-month implied volatility has been creeping higher in tandem with the spot rate since mid-Sep. It last sits at 6.69% after printing a 7-month high of 6.74% on Tuesday.
• Japan's core machine orders will hit the wires today, with flash industrial output coming up Thursday.
• Quick reminder that PM Kishida's Q&A with lawmakers resumes today, ahead of the dissolution of legislature slated for tomorrow.
• Spot USD/JPY last operates -4 pips at Y113.57. Bears need a deeper sell-off past Oct 11 low of Y112.08 to get some reprieve. On the flip side, bulls look for a clearance of the 2.0% 10-DMA envelope at Y114.29.