Cables Claws Back Post-Mini Budget Losses, Yen Dips Into Tokyo Fix

The sterling turned bid in early Asia-Pac trade, with cable virtually erasing losses registered after the announcement of the UK "mini-budget" last Friday. The pound resumed its upward trend even as Thursday saw PM Truss and Chancellor Kwarteng defend their controversial fiscal plans, while BoE Chief Economist said they will prompt "significant and necessary monetary policy response in November."

• The news that PM Truss will hold an emergency meeting with the Office for Budget Responsibility today and growing backlash from Tory backbenchers amid a slump in support for the Conservatives may have lent some support to the sterling.
• Thin liquidity and month-/quarter-end flows likely added fuel to the spike in GBP crosses in early Asia-Pac dealing. BBG cited speculation re: short positions being closed amid the view that Monday's record low in cable may hold for now.
• Selling pressure hit the yen into the final Tokyo fix of the month and quarter. Worth noting that it is a Gotobi day today. Better than expected industrial output and retail sales data released earlier out of Japan caused no reaction in the JPY.
• The BBDXY has held below neutral levels, as the greenback lags all its G10 peers save for the yen.
• China's official PMIs and Caixin Manufacturing PMI headline the regional docket going forward. Final UK GDP, flash EZ CPI, German unemployment, as well as U.S. PCE readings, MNI Chicago PMI & final Uni. of Mich. Sentiment will take focus after hours.
• The central bank speaker slate features Fed's Barkin, Brainard, Bowman & Williams, ECB's Elderson, Visco & Schnabel and Riksbank's Ingves & Jansson.