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  • USD/JPY moves lower in Tokyo on risk-off flows.
  • The US dollar is on the backfoot following a bearish US session.  

At the time of writing, USD/JPY is trading down -0.2% as the US dollar gives back more ground, critically below prior support on the DXY.  

USD/JPY has fallen from a high of 109.07 to a low of 108.82 so far for the day.

USD/JPY probed as high as 109.75 overnight but the market’s exodus from the greenback sunk the pair to these fresh lows seen in this Tokyo open.

The US Consumer Price Index in March was slightly stronger than analysts’ expectations but not enough to deter prospects of the Federal Reserve staying low for longer.

The headline measure rose 0.6% MoM  and 2.6% YoY  (vs median expectation +0.5% MoM  and +2.5% YoY), the ex-food and energy measure +0.3% MoM  and +1.6% YoY  (vs +0.2% MoM  and +1.5% YoY), underscoring that energy costs represented about 50% of the headline rise.  

Meanwhile, a  successful 30-year Treasury auction sparked sent yields lower across the curve. The 2-year government bond yields fell to 0.16%, and 10-year yields fell from 1.68% to 1.62%.

This was despite the stronger than expected March CPI numbers.

The suspension of the Johnson & Johnson COVID-19 vaccine has also played a role in the upside in the yen picking up a safe haven bid.  

Meanwhile, looking ahead and beyond this session’s Reserve Bank of New Zealand event,  the Federal Reserve’s  Beige Book will give an update on economic conditions.

Chair Powell will also be speaking to the Economic Club of Washington.

There will also be attention paid to vice-chair  Clarida, Fed’s Williams, and Fed’s Bostic will also be speaking.