INSIDE JAPAN: Bonds Fall; U.S. Data May Lift USD/JPY, Says CBA

Updated on

JGB 10-year yield rises 1 bp to 0.400%, while 20-year yield climbs 2 bps to 1.205% and 30-year yield adds 1.5 bps to 1.480%.

  • 1Q capital spending rises 7.3% y/y vs est. -0.2% y/y; ex-software rises 8.1% y/y vs est. 2.0% y/y
  • USD/JPY is likely to remain under upward pressure because of the upside risks to U.S. economic data this week, CBA says in note today; sees there is very little in Japan that will influence the FX pair except for speech by BOJ Gov Kuroda on Thursday, and Kuroda has been reluctant to indicate more BOJ easing; expects more policy easing by Oct. because Japanese inflation remains well short of BOJ’s 2% target
  • Yen rises 0.1% to 124.05 per dollar; USD/JPY’s 14-day RSI at 79 in overbought territory.
  • Pivot point at 123.98; USD/JPY support at 123.78, 123.40, 122.82; resistance at 124.36, 124.56, 125.14
  • 1-mo. implied volatility up 24.75 bps at 9.0800%; avg for past yr is 8.3034%; 1-mo. risk reversals up 5.5 bps at 50 bps