AUD/JPY Continues To Press Higher

AUD/USD has rebounded from the earlier test sub 0.6900. We hit a low of 0.6898 but now track back at 0.6925. Note levels just prior to the US payroll print on Friday was around 0.6955/60. A$ demand is still evident on a cross basis, particularly against JPY. AUD/JPY is testing above 93.65, eyeing last week's high above 93.80. NZD and SEK are the only G10 currencies firmer against the AUD since the start of today's sessions, albeit by a slim margin. AUD/NZD sits within recent ranges (last 1.1083).

• AUD/JPY outperformance comes despite a negative lead from regional equities, overall losses are modest though. US futures are also lower, similarly though are only off by -0.25-0.30% at this stage.
• Yen's sensitivity to US yield moves continues to be a theme, although the AU-US 2yr spread is back at -52bps, roughly 10bps wider from Australian closing levels at the end of last week. This may curb AUD/USD gains to a degree.
• Commodities are edging higher across crude, iron ore and copper, but overall moves are fairly modest at this stage.