JPY: Asia Wrap - The Correction Testing The 146.00 Resistance
The Asia-Pac USD/JPY range has been 144.76 - 146.28, Asia is currently trading around 145.70. USD/JPY stayed well supported all through our day, what looks like overextended positioning is being challenged.
- (Bloomberg) - “There’s an apparent irony that US stock futures, which were already higher than they were when Trump’s ‘Liberation Day’ tariffs were announced, are now rallying on news that they’ve been blocked by a US court. The decision, for as long as it stands, is clearly good news for the US economy, though it doesn’t say much about the state of US policymaking and it won’t help businesses make decisions.”
- Ben Hunt on X: “ The initial USD positive reaction to the tariff block is weird to me. Either the Supreme Court reverses the trade court ruling and we’re back to where we were (only worse) or they don’t reverse and Trump initiates the biggest constitutional crisis of the past 70 years. Both are intensely USD negative. https://x.com/EpsilonTheory/status/1927912996174549490
- There was a definitive demand for USD’s all through our session. This has seen USD/JPY challenge its resistance around 146.00, the JPY bulls need this move to top out somewhere around here.
- The market has been very confident of a move lower in USD/JPY but with positioning quite large now the risk of pullbacks does increase. The market is currently testing the resistance around the 146.00 area, there should be sellers around these levels but a close back above 146.00/50 would signal the retracement could have further to go.
Options : Close significant option expiries for NY cut, based on DTCC data: 145.00($2.14b), 143.00($1.98b), 144.00($1.67b). Upcoming Close Strikes : 143.00($3.34b May 30), 140.00($2.78b May 30).
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg
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BONDS: NZGBS: Closed At Session Cheaps, Labour Demand & House Lending Up
NZGBs closed near session cheaps, with benchmark yields 3-4bps higher.
- No cash US tsys trading in Asia-Pac today, with Japan out. TYM5 is trading at 111-27+, -0-01+ from closing levels
- Filled jobs rose 0.2% m/m in March but are still down 1.5% y/y after being flat and down 1.6% y/y in February. However, the 3-month annualised rate at 0.4% turned positive for the first time since April 2024, signalling that Q1 employment may be flat to slightly higher on the quarter when labour market data is released on May 7.
- Labour demand remains weak but shows some tentative signs that it has begun to gradually recover. 3-month momentum is improving for filled jobs and also SEEK job ads, which rose 8.7% annualised in March.
- The RBNZ’s residential mortgage lending data showed lending to all borrowers at its highest since November 2011. First-home buyers up 24% y/y.
- Swap rates closed flat to 1bp higher.
- RBNZ dated OIS pricing closed showing 27bps of easing priced for May, with a cumulative 82bps by November 2025.
- Tomorrow, the local calendar will see ANZ Business Confidence.
- On Thursday, the NZ Treasury plans to sell NZ$250mn of the 4.50% May-30 bond, NZ$150mn of the 4.25% May-34 bond and NZ$50mn of the 5.00% May-54 bond.
BUND TECHS: (M5) Key Resistance Remains Exposed
RES 4: 133.90 1.236 proj of the Mar 25 - Apr 7- 9 price swing
- RES 3: 133.00 round number resistance
- RES 2: 132.56 High Feb 28 and a key resistance
- RES 1: 132.03 High Apr 7 and the bull trigger
- PRICE: 131.24 @ 05:31 BST Apr 29
- SUP 1: 130.70/129.92 20-day EMA / Low Apr 11
- SUP 2: 129.02 Low Apr 10
- SUP 3: 128.60 Low Apr 9 and a key support
- SUP 4: 128.47 Low Mar 28
Bund futures have pulled back from their recent highs. Despite the latest move down, a bull cycle remains in play and the sell-off between Apr 7 - 9 is considered corrective. Attention is on resistance at 132.03, the Apr 7 high and a bull trigger. Clearance of this level would confirm a resumption of the uptrend and open 132.56, the Feb 28 high. Firm support lies at 128.60, the Apr 9 low. A break of this level would alter the picture.
MNI EXCLUSIVE: MNI Discusses The Outlook For Further BoJ Hikes
