I Need A Dollar

USD is in the ascendancy in early Asia-Pac trade, given the catch-up moves in U.S. cash Tsy yields after the Veterans Day holiday was observed in the U.S, leaving it atop the G10 FX performance table.

• JPY finds itself at the bottom of the G10 FX pile, as you would expect in this environment. USD/JPY has added 20 or so pips to trade just shy of Y114.30 at typing, with a right-hand side fixing helping the early yield-driven moves. As we noted earlier, one desk suggested that Japanese exporters and retail accounts acted as a potential cap on the rate on Thursday, while the $2.2bn of FX options with strikes of Y113.90-114.00 rolling off at Friday's NY cut may have acted as a bit of a magnet. There isn't much in the way of tier 1 data to impact the broader risk backdrop on Friday (U.S. UoM inflation expectations will be scrutinised), with the cash Tsy market dynamics after the aforementioned 24-hour closure set to shape price action in the pair during Tokyo dealing. Our technical analyst notes that USD/JPY worked against the short-term softer tone Wednesday. The strong recovery signals the potential end of the recent corrective pullback with Wednesday's candle pattern appearing to be a bullish engulfing reversal. If correct, this pattern signals scope for a climb towards key resistance at the Oct 20 high (Y114.70). A break would confirm a resumption of the primary uptrend.
• USD/CNH is little changed, with today's USD/CNY mid-point fixing matching broader sell-side expectations.
• There isn't much in the way of tier 1 risk events on the broader economic calendar on Friday, so it will be a case of headline watching and assessing the broader macro flows. We reiterate that the press conference at the end of the CCP's plenum in China will garner some interest today, but may not be a market mover (it should get underway in about ~30 minutes time).