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FOREX: USD A Touch Firmer, Mostly Against Yen, Limited Moves Overall

FOREX
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The USD is a touch firmer in the first part of Tuesday dealings. The USD BBDXY index is unchanged at 1222.85. Yen is the weakest performer in the G10 space, off around 0.20% to be last around 143.90 in USD/JPY terms (earlier highs were at 144.12). We are still well sub Friday highs from last week (146.49).

  • The BoJ Summary of Opinions painted a cautious outlook around further rate increases, with the CPI trend, wage developments and the US economy all key watch points. The stronger yen has also reduced inflation risks.
  • Earlier data showed mixed labour market trends for Japan, while the Q3 Tankan survey results were mostly firmer than expected, but don't show an economy running away rapidly. Local Japan equities are tracking higher as well.  
  • The summary of opinions has weighed on yen at the margins, while carry over weakness from Monday's session may also be in play. US yields are lower in early dealings, but losses are not much beyond 1bps at this stage.
  • We did see yen somewhat stronger earlier when headlines crossed of targeted ground raids being conducted by Israel into Lebanon, but the impact was limited.
  • Elsewhere, NZD/USD is down a touch, last near 0.6340/45. Earlier data from the NZIER suggested still weak Q3 domestic activity but that sentiment was improving. Inflation expectations came down sharply. NZ Treasury echoed similar sentiments in its fortnightly update.
  • AUD/USD is close to steady, last near 0.6910/15. We have Australian building approvals and retail sales for August coming up soon. 
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The USD is a touch firmer in the first part of Tuesday dealings. The USD BBDXY index is unchanged at 1222.85. Yen is the weakest performer in the G10 space, off around 0.20% to be last around 143.90 in USD/JPY terms (earlier highs were at 144.12). We are still well sub Friday highs from last week (146.49).

  • The BoJ Summary of Opinions painted a cautious outlook around further rate increases, with the CPI trend, wage developments and the US economy all key watch points. The stronger yen has also reduced inflation risks.
  • Earlier data showed mixed labour market trends for Japan, while the Q3 Tankan survey results were mostly firmer than expected, but don't show an economy running away rapidly. Local Japan equities are tracking higher as well.  
  • The summary of opinions has weighed on yen at the margins, while carry over weakness from Monday's session may also be in play. US yields are lower in early dealings, but losses are not much beyond 1bps at this stage.
  • We did see yen somewhat stronger earlier when headlines crossed of targeted ground raids being conducted by Israel into Lebanon, but the impact was limited.
  • Elsewhere, NZD/USD is down a touch, last near 0.6340/45. Earlier data from the NZIER suggested still weak Q3 domestic activity but that sentiment was improving. Inflation expectations came down sharply. NZ Treasury echoed similar sentiments in its fortnightly update.
  • AUD/USD is close to steady, last near 0.6910/15. We have Australian building approvals and retail sales for August coming up soon.