JGB TECHS: (U5) Returns Toward Lows

The overnight range was 144.43 - 145.04, Asia is currently trading around 144.90. Cross JPY continues to benefit from the better performance in risk and US stocks. This has seen the move lower in USD/JPY stall and return to its recent range of 142.00 - 147.00.

• Kyodo News via Bbg - “The Constitutional Democratic Party of Japan announced its manifesto for the summer House of Councillors election on the 10th. Under the slogan "We will protect you from rising prices," the manifesto clearly states that the consumption tax rate on food will be 0%. As a short-term measure until the tax cuts are implemented, the manifesto also includes the payment of a "dining table support grant" of 20,000 yen per person. The aim is to put measures to combat rising prices at the forefront and show the axis of conflict with the Ishiba administration.”
• Overnight demand returned on dips in USD/JPY as US Stocks continued to press higher.
• The market still seems very confident of a move lower in USD/JPY but with positioning quite large now we have seen the risk of pullbacks increase.
• With the failure to break below 142.00 last week, price is back in the middle of its recent 142.00 - 147.00 range and will need a break either side of that to get a clearer direction. US CPI tonight will dictate price action. Expires below show a lot of interest around the 145.00 area.
• Options : Close significant option expiries for NY cut, based on DTCC data: 145.00($1.14bm). Upcoming Close Strikes : 143.00($1.28b June 12), 140.00($1.22b June 12), 145.00($4.54b June 16).
• CFTC data shows Asset managers maintained their already extensive JPY longs, and leveraged funds are trying again to build their own longs.

• Data/Event : PPI

  Fig 1 : USD/JPY Spot Daily Chart

  

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

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• Thailand to Sell THB25bn of 2030 Bonds
• Thailand to Sell THB9bn of 2050 Bonds
• China to Sell CNY170bn 2026 Bonds
• China to Sell CNY40bn 91-Day Bills
• Vietnam To Sell VND 0.5Tln 2030 Bonds; (TD2530009)
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• Vietnam To Sell VND 2.0Tln 2040 Bonds; (TD2540037)
• Vietnam To Sell VND 0.5Tln 2055 Bonds; (TD2555052)
• Taiwan to Sell NT$30 Billion 28-Day Bills
• India to Sell INR50bn 182-Day Bills
• India to Sell INR90bn 91-Day Bills
• India to Sell INR50bn 364-Day Bills
• South Korea to Sell KRW2tn 63-Day Financial Bills