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May 30 - 03:55 PM

USD/JPY - Corrects Lower On Dovish US Data, But Crucial Data Comes Friday

By Randolph Donney  —  May 30 - 01:40 PM
  • USD/JPY fell 0.6% as Tsy ylds retreated amid slightly dovish US data

  • Pullback in line with Tsy yld correction, Tsy-JGB ylds spreads slip

  • Drop was from Wed's 157.715 high by May's 157.99 peak on the 1st

  • May 1 was the day of the dive to 153 on suspected BoJ intervention

  • Fri's Tokyo CPI and US core PCE are eyed for BoJ and Fed policy pricing

  • Markets are now pricing in 35bp of Fed cuts, 28bp of BoJ hikes by Dec

  • But still a yawning gap between coming Fed and BoJ rates, Tsy & JGB ylds

  • The 157.00/50 levels are the most popular expiries near-term

  • Close below last week's 155.50 low is needed to weaken the uptrend

  • But decent U.S. data clearly a plus to test May, April 157.99/60.215 highs

  • And MoF intervention risk, with updated related data due out on Friday

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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