USD/JPY flows: Mixed Trade Data

The Japan November exports came in higher than expected at +3.8% y/y while imports missed estimate at -3.8% y/y. It continue to points toward attractive Japanese goods due to favorable exchange rate and domestic demand remaining weak. The market currently pricing in very little odds for a hike from the BoJ later tomorrow but we believe there is a good chance for them to do a 10bps tightening, given the current inflationary dynamics and trend inflation forecast.

USD/JPY is trading 0.02% higher at 153.54 as market brace for any surprise from the BoJ.