JPY: USD/JPY - Retreats On A Dovish Fed, Resistance Towards 156.00
The overnight range was 154.95 - 156.07, Asia is currently trading around 155.55. The pair continued to build on its move lower overnight in reaction to a dovish Fed. The market was clearly wrong-footed looking for a hawkish cut and has had to pare back those trades. The market has been pricing in the fact that the Yen move looks likely to force the BOJ into action in December. This together with a dovish Fed could be enough to halt the Yen falling out of bed for now. Technically USD/JPY is in an uptrend, the first big support is back toward the 152.50-154.50 area. In today's Asian session, look for resistance back toward the 155.90-156.20 area, should this hold, look for a retest of the overnight lows at some point and then another examination of the support below.
- Bloomberg - “Nomura strategists recommend buying the yen against the dollar as a key trade for 2026. They believe Japan’s government may resist prolonged currency weakness, citing potential tailwinds like narrowing rate differentials and an improving trade balance.”
- MNI BRIEF: BOJ Dec Tankan To Show Key Sentiment Edging Up. The Bank of Japan’s December Tankan survey is expected to show a slight improvement in benchmark business sentiment from three months earlier, while capital investment plans by major firms are set to remain solid, economists predict.
- Options : Close significant option expiries for NY cut, based on DTCC data: 155.00($1.55b), 157.50($899m). Upcoming Close Strikes : 156.50($1.2b Dec 15) - BBG.
- The USD/JPY Average True Range(ATR) for the last 10 Trading days: 110 Points
- Data/Event : Bloomberg Dec. Japan Economic Survey, Capacity Utilization MoM, Industrial Production
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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JPY: USD/JPY - Fails Toward 154.50 Again On A Weaker ADP Print
The overnight range was 153.67 - 154.44, Asia is currently trading around 154.10. The pair failed again back toward the 154.50 area as the USD got sold off in response to a weaker ADP print. The return of a positive sentiment in risk has brought the focus in USD/JPY back to the 154-155 resistance area. A sustained break above here is needed to potentially see the uptrend regain upward momentum, through here the focus would then turn toward the 160 area where I would start to become wary of intervention risks. On the day it looks to be a 153.60-154.50 range, look for dips back toward 152.00 and then the more important 149.00-150.00 area to be supported.
- MNI BRIEF: Japan Oct Sentiment Posts 6th Straight Rise. Japan’s Economy Watchers sentiment index rose for a sixth consecutive month in October, prompting the government to upgrade its assessment from the previous month. The stronger data helped ease some Bank of Japan concerns that private consumption may lose momentum as households struggle with high living costs, though the survey does not directly measure consumption.
- MNI INTERVIEW: Fed's Risk Management Cuts Not Enough - Revelio. The U.S. labor market will continue to soften and the Federal Reserve's 50 basis points of interest rate easing so far this year will not be enough to shore up hiring, private data provider Revelio Labs’ chief economist Lisa Simon told MNI.
- Options : Close significant option expiries for NY cut, based on DTCC data: 152.00($668m). Upcoming Close Strikes : none - BBG.
- Data/Event : Money Stock M2, Machine Tool Orders
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
ASIA: Government Bond Issuance Today
- Bank of Korea to Sell KRW700 bn 1-Year Bonds
- Hong Kong to Sell HK$1.5 Bn 1-year Bonds
- Vietnam To Sell VND 1.5Tln 2040 Bonds; (TD2540037)
- Vietnam To Sell VND 3.0Tln 2030 Bonds; (TD2530010)
- Vietnam To Sell VND 0.5Tln 2055 Bonds; (TD2555052)
- Vietnam To Sell VND 8.0Tln 2035 Bonds; (TD2535022)
- Thailand to Sell THB30 Bn of 2030 Bonds
- Bank Indonesia to Sell 96D SUVBI Bills
- Bank Indonesia to Sell 367D SUVBI Bills
- Bank Indonesia to Sell 185D SUVBI Bills
- Bank Indonesia to Sell 31D SUVBI Bills
- Bank Indonesia to Sell 273D SUVBI Bills
- China to Sell CNY55 Bn 91-Day Bills
- India to Sell INR60 Bn 182-Day Bills
- India to Sell INR70 Bn 91-Day Bills
- India to Sell INR60 Bn 364-Day Bills
ASIA: Coming Up in Asia Today
| 0100GMT | 0800HKT | 1000AEDT | South Korea Unemployment rate OCTOBER |
| 0500GMT | 1200HKT | 1400AEDT | South Korea Money Supply M2 SA MoM SEPTEMBER |
| 0500GMT | 1200HKT | 1400AEDT | South Korea Money Supply L SA MoM SEPTEMBER |
| 1230GMT | 1930HKT | 2130AEDT | India CPI YoY OCTOBER |
source: Bloomberg Finance LP / MNI
