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Jan 26 - 05:55 PM

USD/JPY - Recovers On Speciously Upbeat U.S. Data, With Key Tech Hurdles Looming

By Randolph Donney  —  Jan 26 - 02:00 PM

  • USD/JPY up with Tsy yields after speciously strong US data

  • Headline GDP and durables beats masked underlying weakness nL1N34B1GJ

  • And early Tsy yields rise retreated after the 7-yr auction take-down

  • Thur's 130.625 high on EBS held well below the 131.58 post-BoJ peak

  • And also below the falling 30-DMA at 131.53 by the dn TL from December

  • BoJ's 50bp cap on 10-yr JGB ylds leave yen vulnerable to yld rises elsewhere

  • But core weakness in GDP and durables limits Tsy yld gains

  • Fed still seen downshifting to two 25bp hikes before H2 onward rate cuts

  • Core PCE, income, spending and saving are Fri's top data focus

  • Mich sentiment and pending homes sales unlikely to move the needle

  • A sub-129 close could bring 127.215 trend lows into play again

  • Key for the downtrend may be response to the Feb. 1 Fed news

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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