USD/JPY Pulls Back as Treasury Buybacks Weaken Dollar Demand

The USD/JPY pair experienced a pullback after the US Treasury Department announced increased Treasury buybacks, leading to a decrease in demand for the dollar.

This move had a significant impact on the currency market, causing the pair to retreat to a familiar area around the 158 handle.

The BoJ and US Treasury Department have both expressed their desire to see a weaker spot rate for the pair, but longs have continued to hold on until greater evidence of a fundamental shift appears.

Tomorrow's CPI print out of Japan will be closely watched, as it could provide another shock factor to longs holding positions and potentially lead to a reversal in the market.