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FOREX: Yen Weakness Continues, As US 10yr Yield Hits Multi Month Highs

FOREX
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Yen weakness remains the standout in G10 FX. USD/JPY is quickly closing on 152.00, having got to 151.95, just above the July 25 low. We are around 0.55% weaker in yen terms. The BBDXY USD index sits a little higher relative to end Tuesday levels in the US, last near 1258.8, largely thanks to yen weakness.

  • Outside of yen weakness, we haven't seen large G10 FX shifts. The early trend was for broader USD based gains, but as the session has progressed, we have  seen more of a risk on feel. CHF is also weaker, albeit off by a little under 0.20% at this stage (last near 0.8670).
  • Helping stabilizing sentiment  for the likes of AUD and NZD has been a stronger tone to HK and China equities. AUD/USD last just under 0.6680, while NZD/USD is at 0.6040. We are up from earlier session lows.
  • US yields are firmer, around 2bps across the Tsy benchmarks. This has aided yen underperform, US-JP yield differentials, particularly for the 10yr tenor continuing to track higher. The 10yr Tsy hitting fresh highs back to late July.
  • The AUD/JPY cross has hit fresh highs back to late July, getting close to 101.59. We sit slightly lower now.
  • Looking ahead, the Fed’s Bowman and Barkin speak and the Beige Book is published and September existing home sales print. ECB’s Lagarde and Lane appear, as well as BoE’s Breeden and Bailey. The BoC decision is announced and a 50bp rate cut is expected.
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Yen weakness remains the standout in G10 FX. USD/JPY is quickly closing on 152.00, having got to 151.95, just above the July 25 low. We are around 0.55% weaker in yen terms. The BBDXY USD index sits a little higher relative to end Tuesday levels in the US, last near 1258.8, largely thanks to yen weakness.

  • Outside of yen weakness, we haven't seen large G10 FX shifts. The early trend was for broader USD based gains, but as the session has progressed, we have  seen more of a risk on feel. CHF is also weaker, albeit off by a little under 0.20% at this stage (last near 0.8670).
  • Helping stabilizing sentiment  for the likes of AUD and NZD has been a stronger tone to HK and China equities. AUD/USD last just under 0.6680, while NZD/USD is at 0.6040. We are up from earlier session lows.
  • US yields are firmer, around 2bps across the Tsy benchmarks. This has aided yen underperform, US-JP yield differentials, particularly for the 10yr tenor continuing to track higher. The 10yr Tsy hitting fresh highs back to late July.
  • The AUD/JPY cross has hit fresh highs back to late July, getting close to 101.59. We sit slightly lower now.
  • Looking ahead, the Fed’s Bowman and Barkin speak and the Beige Book is published and September existing home sales print. ECB’s Lagarde and Lane appear, as well as BoE’s Breeden and Bailey. The BoC decision is announced and a 50bp rate cut is expected.