Dollar Remains Supported, A$ & NZD Weaker, BoJ Coming Up

The USD is tracking higher in the first part of Friday's session. AUD and NZD weakness is evident, both currencies down by around 0.20% at this stage. The BBDXY is a touch higher, last near 1265.

• This looks to be a continuation of the risk off tone seen in Thursday trade (although EUR/USD is very steady at this stage, last near 1.0735/40).
• NZD/USD is down slightly more than AUD, the pair last near 0.6155. We aren't too far away from pre US CPI levels on Wednesday, which in close to 0.6140.
• Local data has remained negative for the NZD, with the May manufacturing PMI falling to 47.2 from 48.8 prior. Food prices also fell 0.2% in May (form +0.6% in April).
• AUD/USD is back to 0.6620/25, also back close to pre US CPI levels.
• In terms of cross asset sentiment, US equity futures are close to flat. For those equity markets open in the region at this stage, we are mostly down modestly.
• In terms of US yields, we are biased higher in early dealings but gains are less than 1bp at this stage.
• USD/JPY sits a touch higher, last near 157.10. Focus is firmly on the upcoming BoJ decision, with balance sheet and BoJ bond buying ops in focus. No rate changes are expected.
• Note the April decision printed at 12:22pm Tokyo time, 04:22am UK time. We are typically on BoJ watch though once JGB futures close a bit after 11am local time.