A 1.3 percent surge in core U.S. durable goods orders in March bodes well for a strong Q1 GDP report Friday and should underpin relatively attractive Treasury yields Japanese investors are buying nL1N2270H1, limiting USD/JPY losses.
The 37k rebound in jobless claims from the previous week's nearly 50-year low partially offset the durables.
The bigger question is how much of the yen short covering expected to occur before the long Japanese holiday has already occurred nL1N2260M1.
Those flows have reduced dollar gains against the yen compared to its rise versus other currencies this week.
The breakdown in yen-funded carry trades extended today after a surprise drop in South Korean GDP, tumbling Chinese stocks and yuan, as well as fresh concerns about Germany's banking sector and the European economy.
USD/JPY's Wednesday close above 76.4 percent of the 114.55-104.10 November-January plunge and new 2019 high at 112.40 look bullish.
But today's pullback below the prior two days' 111.68/65 lows suggests a broader topside breakout will at least await tomorrow's U.S. GDP report for impetus.
Today's biggest options expiries are at 111.40-50, with 112s a staple, if smaller, into next week.
The 200-DMA at 111.50 looks pivotal on a closing basis.
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