USD/JPY flows: CPI continues to tread lower

The April Japan y/y CPI continue to moderate with headline falling to 2.5% from 2.7%, ex fresh food to 2.2% from 2.6% and ex fresh food & energy to 2,4% from 2.9%. While it remains above 2%, the further moderation would put a cap on BoJ's tightening magnitude. 10 yr JGB yields gained its foot above one percent while U.S. Treasury yields retrace after the overnight gains. 

USD/JPY is trading 0.1% at 157.05. Despite the lack of verbal intervention, one can not rule of the possibility of BoJ's intervention if USD/JPY continue to rally from this point.