USD/JPY has had a steady rise through London to trade to highs of 118.50 but has pulled back quickly to 118.38 with the Nov PCE data coming in lower than expectations of 2.4%, at 2.2%. This has sent US bond yields lower, falling from 4.58% in the ten-year part of the curve to 4.56%.
However, USD/JPY was likely to be capped around the highs anyway with talk of option-related selling at these levels including Asian central bank sales, and exporter offers. Stops remain at higher levels of 118.65. On the downside, bids are eyed around 118.20/25, with further support at 118.00 and stops under 117.80.
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