IRAN: Military Command - Hormuz Closed For All Vessels

• RES 3: 133.15 - High Feb 24 ‘26
• RES 2: 131.80 - 38.2% retracement of the Feb - Mar Bear Leg
• RES 1: 130.67 - 50-dma (cont)
• PRICE: 129.31 @ 16:17 BST May 11
• SUP 1: 128.60 - Low Apr 27
• SUP 2: 129.27 - Low Mar 27
• SUP 3: 129.06 - 1.500 proj of the Aug 6 ‘24 - Mar 26 - Apr 7 ‘25

JGBs continue to fade, erasing much of the mid-April recovery in the process. Nonetheless, there remains a sizeable gap with the recent pullback lows. Price remains well below the 50-dma, a break above which is needed to highlight a stronger short-term reversal and signal scope for any recovery. Interim supports rest at 128.71 and below at 129.06.

The USD/JPY range overnight  was 156.95-157.27, Asia is currently trading around 157.20. The pair continues to find buyers on dips helped by both Oil and US Treasuries moving higher. The BOJ will be disappointed with the limited retracement their intervention has achieved. The fact that they have shown they are willing to back up their previous selling though and seemingly drawing a line in the sand toward 160 should keep the Yen bears at bay in the short-term. On the day, the first support is toward 156.50 and then the 155.00-155.50 area. I suspect the market will be fading this move between 157.25-158.25 initially and looking to reload for another potential wave from the BOJ.  

• “Bessent’s Deep Grasp of Japan Policy to Challenge Takaichi. US Treasury Secretary Scott Bessent is taking an assertive approach to shaping Japan's economic trajectory, with his third trip to Japan in over a year kicking off Monday.” - BBG
• “The Trump administration plans to temporarily reduce tariffs on beef imports to help counter high US consumer costs, the WSJ reported. And a Senate Republican announced a bill to suspend the gasoline tax to ease war-related pain at the pump.” - BBG 
• Options : Close significant option expiries for NY cut, based on DTCC data: 154.00($611m), 156.00($1.46b) 156.50($1.09b). Upcoming Close Strikes : 155.00($2.15b May 14), 156.00($1.99b May 14), 159.50($1.77b May 13) - BBG.
• The USD/JPY Average True Range(ATR) for the last 10 Trading days: 108 Points
• Data/Event : Household Spending, Leading Index, Japan to sell 10-year bonds 

Fig 1 : USD/JPY Spot Daily Chart

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

• In recent weeks a move higher in US yields has led to a sell off in gold - yet the opposite occurred overnight as a return of the safe haven bid and being dragged higher by a huge updraft from silver boosted bullion.
• Gold finished up +0.48% at US$4,735, edging back above all key moving averages.   
• The ST momentum indicators such as MACD and 14-day relative strength index are now broadly neutral, leaving gold prices open to external leads such as oil and US yields and for now the safe haven bid and silver.  
• Brent had jumped +5% initially yesterday following Trump's rejection of the Iranian offer and finished +2.8% for the day.  
• Adding to Gold's impact from oil will be data out in the US later. Stronger than expected payrolls turns the focus now to this week's CPI. CPI is forecast to remain above the FED's targets - re-affirming that rates are on hold for the near term.
• Gold is now in an interesting push pull between inflationary pressures and yields.  For now it seems unlikely that gold will gap higher from here ahead of the CPI, rather continue to trend near to the key EMAs.
• India's prime minister told people to stop buying the precious metal for a year in a bid to boost the country's foreign-exchange reserves.