ASIA: Government Bond Issuance Today

The Friday night range was 155.98 - 157.78, Asia is currently trading around {USDJPY Curncy}. The BOJ is in a tough spot, hike rates and your currency explodes higher. The minimal reduction in differentials is not incentivizing a market that is concerned about Japan’s Fiscal policy to start buying Yen. A test of the BOJ/MOF resolve looks inevitable at the moment as the market turns its focus to the important 160.00 area. Technically USD/JPY remains in an uptrend, while the first support back toward the 152.50-154.50 area holds it remains a buy on dips. In today's Asian session, we might get some reversion back to the mean after such a strong move on Friday but look for buyers to reemerge on dips back toward the 15.60-90 area initially. 

• Bloomberg - “Yen Needs a Volatility Shock as Policy Normalization Falls Short. While the Bank of Japan’s latest rate increase represents further progress toward normalizing rates back toward neutral levels, it does little to meaningfully improve Japan’s deeply negative real-rate profile. Governor Kazuo Ueda’s emphasis on optionality, coupled with the absence of explicit forward guidance, reinforces expectations that tightening will proceed only gradually.”  {NSN T7J0JBKGIFPG <GO>} 
• MNI BOJ WATCH: Ueda Signals More Hikes, Timing Unclear. Bank of Japan Governor Kazuo Ueda laid the groundwork for further interest rate increases, but provided little clue as to timing and stressed that policymakers must examine the impact of higher rates on the economy, inflation and financial conditions
• Options : Close significant option expiries for NY cut, based on DTCC data: 155.00($1.25b), 156.00($870m), 157.50($1.22b). Upcoming Close Strikes : 156.00($1.32b Dec 23), 158.00($868m Dec 23)  - BBG.
• The USD/JPY Average True Range(ATR) for the last 10 Trading days: 101 Points
• Data/Event : Tokyo Condominiums for Sale YoY

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

• Bank of Korea to Sell KRW500 bn 91-Day Bonds
• South Korea to Sell KRW800 bn 5-Year Bonds
• Hong Kong to Sell 40 Billion 6-M PBOC Bills

source:  Bloomberg Finance LP / MNI