US OUTLOOK/OPINION: A Stacked Week Ahead For US Macro

USD/JPY struggled for meaningful upside through Wednesday trade. Moves above 155.50 drew selling interest, while dips to just under 155.00 drew buying interest. We track near 155.30 in early Thursday dealings, after a yen gain of around 0.15% for Wednesday's session. Yen outperformed the rest of the G10, with most currencies down, led by the A$.

• The DXY and BBDXY USD indices are a touch higher for Wednesday trade, with a brief spike higher as the FOMC unfolded. The FOMC decided to remove the reference to inflation making progress towards the goal, despite it remaining somewhat elevated. However, Chair Powell explained that this was merely “cleaning up the language” and was not intended to send a signal.
• US yields sit slightly higher at the front end of the curve, but little changed at the back end. US-JP yield differentials are holding close to recent lows.
• A softer US equity tone (SPX off 0.47%, Nasdaq down 0.51%), with a flurry of earnings from the tech space late in US trade, may have also helped the yen at the margins. AUD/JPY is sub all key EMs, and back around the 96.70/75 handle. The 96.00 region has marked lows so far in 2025.
• For USD/JPY technicals, a near term bear threat persists following Monday's sharp pull back (low of 153.72). A resumption of weakness would open 152.55, a Fibonacci retracement point. Initial firm resistance is at 156.75, the Jan 23 high.
• Note in the option expiry space today, the following for NY cut later today: Y154.00($627mln), Y154.75($700mln), Y155.00($1.4bln), Y156.00($544mln).
• On the local data calendar today we just have weekly offshore investment flows.