Dollar Index Tracking Down For 4th Straight Week, Yen Up On Ueda Remarks

The USD has spent the first part of Asia Pac Friday trade giving back some of Thursday's gains. The USD BBDXY index is back under 1333, off around 0.20%. This week's lows for the index rest near the 1228 level, we are tracking 0.45% lower for the week for this this index (the fourth straight weekly loss).

• Yen gains have been the standout at this stage. USD/JPY got to lows of 145.30, but sits higher in latest dealings, near 145.65/70, still a gain in yen terms of around 0.45% (we opened near 146.30).
• Yen has received support from remarks by BoJ Governor Ueda who is before Japan's lower and upper house today. Ueda struck a slightly more hawkish tone relative to remarks made by Deputy Governor Uchida (back in early August, - if the market is volatile the BoJ won't hike). The Governor noted that the BoJ outlook hasn't changed and that the current policy rate is far below the likely neutral rate.
• If the economy evolves as expected further policy adjustments can be made Ueda stated.
• Earlier data showed Japan national CPI for July close to expectations. The core measure which excludes fresh food and energy was sub 2.0% y/y, but base effects played a role. There were also some signs of firmer services related inflation.
• In the cross asset space, US equity futures have rebounded, up 0.30% for Eminis and 0.50% for the Nasdaq. US yields are tracking lower, albeit only unwinding part of Thursday's gains. These moves are likely weighing on the USD at the margin.
• AUD/USD has ticked higher, last up 0.2% to 0.6720. NZD/USD is up by a similar amount to 0.6150/55. The Kiwi largely ignored a softer Q2 retail sales volume print earlier, but the market is well aware of NZ's current growth headwinds.
• Looking ahead, the main focus will be on Fed Chair Powell's speech at Jackson Hole. Despite the focus on Powell and the proximity to the September Fed meeting, relatively little clarity is expected from the Fed Chair on Friday - he's unlikely to deviate from the script too much - emphasizing data dependence and a meeting-by-meeting approach - however any reference to the envisaged tempo of cuts or the eventual destination for rates would be market-moving. Our full Jackson Hole preview found here: https://roar-assets-auto.rbl.ms/files/66056/Aug202...