USD/JPY remains generally supported by U.S. data, but strong ADP nZON1YCY00 and mixed ISM nN9N1OC01P keep the focus on Friday's employment report after today's placeholder Fed meeting.
The BOJ's stealth curve steepening and an odd CNY rebound in the face of fresh U.S. tariff threats are tentatively yen supportive, as the 61.8 Fib of USD/JPY's late July drop at 112.18 caps into large 112 option expiries Thursday and Friday.
To get past key 200-WMA and 2016-18 drop Fibo resistance at 113.27/29, July jobs data need to reinforce rising Treasury-JGB rate spreads.
The BOJ's new upper range for 10-year JGB yields at 20bp is already being eyed, with today's 8bp surge to 13bp, but it's still 287bp below T-note yields.
Even if JGBs reach 20bp there would still be a 280bp spread.
But Treasury and Bund yields were dragged about 3-4bp higher by today's JGB yield rise, thus JPY spread-based gains are limited.
Today's CNY rebound in the face of new U.S. tariff threats and Shanghai stock market losses is also a minor JPY support to the extent yuan depreciation is no longer seen as China's go-to trade war countermeasure -- a big if.