JPY: USD/JPY - Finds Some Supply Above 147.00, Lower US Yields Offer Relief

The overnight range was 146.25 - 146.99, Asia is currently trading around 146.25. USD/JPY finally topped out above 147.00 after moving almost 400 points in 5 days, getting relief from a move lower in US yields. The USD/JPY relentless march higher has been pretty telling, challenging a market positioned the wrong way. Price is now pushing towards the upper boundary of its 142.00 - 148.00 range, the pair will probably continue to take its cue from the US rates market.

• (Bloomberg) - “Near-term, it is difficult to rule out a run for the pair towards its 200-day moving average close to 150.00, given the BOJ’s current ultra-dovish stance and the possibility of a general USD rebound amid wider positioning shifts,” strategists at UBS Investment wrote”
• “We now raise our end-Q3 target to 140.00 from 135.00 previously,” they said. “If Japan fails to reach a deal with the US that avoids reciprocal tariffs, it could encourage still more BOJ dovishness”
• (Bloomberg) - “An auction of 20-year Japanese government bonds Thursday will beam the searchlight back on rising yields as a looming election heightens concerns about fiscal expansion.”
• USD/JPY has lost all downside momentum for now and is back in its wider 142.00 - 148.00 range. The Market is long JPY and should the USD manage to continue to correct higher the risk is a move back to the top end of the range to further challenge the conviction of the shorts.
• Options : Close significant option expiries for NY cut, based on DTCC data: 147.00($832m).Upcoming Close Strikes : 143.50($960m July 15).
• CFTC data shows Asset managers increased their JPY longs slightly +94753, while leveraged funds maintained their longs they have tried to rebuild +15798.
• Data/Event : PPI, Japan Weekly Investment Flows, Tokyo Office Vacancies

Fig 1 : USD/JPY Spot Daily Chart

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