USD/JPY flows: Dropped along Isreal's "drones"
Israel retaliated with potential missile and drones attack in Iran
But Iran said "there have been no airstrikes, only shot-down quadcopters"
Japan National y/y CPI at 2.7%, down from 2.8%
On Friday's Asia session, it was reported that Israel has retaliated and struck multiple targets in Syria and Iran. It seized market's attention as it may lead to another round of escalation in the already tense geopolitical picture. As the fog of war spreads, risk asset was offered and havens are bid. The session progress with Iran saying "there have been no airstrikes, only shot-down quadcopters" and calms the market.
From the Japan front, we see y/y National CPI coming in lower than estimate at 2.7%, ex fresh food 2.6%, ex fresh food and energy at 2.9%, all showing further moderation from February. We expect such to continue throughout of the rest of 2024 with speed bumps in the coming month on wage spike.
USD/JPY dropped to 153.58 on geopolitical fear before quickly rebounded to 154.26 to trade 0.25% lower.