BUZZ-COMMENT-USD/JPY in new, tad lower range for now?

Jan 22 (Reuters) - USD/JPY has ratcheted down after reaching a 158.88 high on Jan 10, and appears to be settling into a slightly lower core 155.00-156.50 or wider 154.50-157.00 range as the market awaits concrete U.S. trade measures under the new Trump administration.

President Donald Trump announced a number of executive orders after his inauguration Monday. Suggestions of 25% tariffs on imports from Canada and Mexico prompted a flurry of activity on the foreign exchange market Tuesday but the lack of any concrete orders has left the impression that Trump will go slow in advancing his trade and tariff agenda.

A narrowing of Japanese government bond and U.S. Treasury interest rate differentials from recent highs suggests USD/JPY may have found a top at or near Monday's 156.56 high. The 10-year yield differential has fallen from a high of 353 basis points on Jan 14 to 344 bps on Tuesday.

As to a base, USD/JPY saw a decent bounce after trading down to 154.78 Tuesday, and good technical support looks to be in place at the 55-day moving average at 154.79 then and currently at 154.81. A base of 154.45 on Dec 19 just below provided the launching pad for the eventual rally to 158.88.

Option expiries through January will help contain spot FX action too with particularly massive strikes at 155.00 and 156.00.

Granted, the market remains nervous and breaks above and below the current core range may occur as news of fresh Trump initiatives hits the wires. However, tariffs have been somewhat discounted, and it may take fresh news or factors for USD/JPY to break out in any meaningful way.

For more click on FXBUZ

(Haruya Ida is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai)

((haruya.ida@thomsonreuters.com;))