The beginning of the week noticed a niche increased within the pair because it looks as if the federal government is teeing up BOJ deputy governor Amamiya to be the successor to Kuroda on the central financial institution. Whereas the bounce is encouraging, it nonetheless does not actually take away from the draw back development that has been persisting since late October final 12 months.

The sequence of decrease highs, decrease lows remains to be comparatively intact and I’d argue that it’s going to take a push again above 135.00 from right here to invalidate that sample and pose some added questions.

In any other case, as talked about right here, there are nonetheless causes for sellers to stay with their conviction for a push decrease in USD/JPY within the months forward.

The push decrease right this moment is not a lot because it simply eats a bit into the hole increased from yesterday. All eyes will probably be on Fed chair Powell’s speech/interview later right this moment however simply be aware that if there are extra headlines on the potential subsequent BOJ governor, that may even influence the yen aspect of the equation.

As issues stand, there may be nonetheless ongoing stress on 10-year JGB yields on the 0.50% ceiling and that continues to inform the story that markets stay satisfied of some type of coverage change by the Japanese central financial institution down the highway.