Dollar Index Drifts Lower Ahead Of US NFP, Yen Up Around 3.5% This Week

The BBDXY USD index sits lower for the first part of Friday trade, last near 1253.00, off around 0.10% versus end Thursday levels in NY.

• All of the G10 bloc is firmer against the USD, albeit away from best levels, as the key US NFP print comes into view.
• USD/JPY got to fresh lows of 153.76, but we now sit back near 153.95, still around 0.45% stronger in yen terms. Japan markets are closed today (and on Monday), but given this week's tendency for intervention to happen during lighter liquidity periods, there is likely to be some degree of caution for the market.
• Key levels to watch on the downside in the near term would be the 50-day EMA near 152.40.
• Yen is up around 3.5% so far this week, its best gain since Nov 2022.
• AUD and NZD are both higher, but gains are less than 0.1% at this stage. AUD/USD was last near 0.570, NZD/USD in the 0.5965/70 region.
• The positive tone to US equity futures and regional equities has likely helped sentiment, but follow through USD selling has been limited against both currencies.
• US Tsy futures have drifted higher, but Thursday late NY session highs remain intact.
• Looking ahead, we have the US non-farm payroll print. Before that focus is likely to rest on the Norges rate decision in Norway.