Japan Officials Don't Confirm Intervention OR Rate Check, NZD Recoups Early Losses

Yen volatility has dominated the first part of Friday G10 FX trade. The BBDXY sits little changed for the session, last near 1254. We remain above post US CPI lows from Thursday US trade (just under 1250).

• USD/JPY had an earlier low of 157.76, after drifting to highs of 159.45 in the first part of trade. The sharp correction may have been driven by a reported EUR/JPY rate check (per onshore Japan media). USD/JPY has stabilized this afternoon, mostly holding above 159.00.
• We have had a host of comments from Japan officials, with FX Chief Kanda speaking first, along with Chief Cabinet Secretary Hayashi and finally FinMin Suzuki.
• The comments were largely in line with on-going FX rhetoric around excessive FX moves, which are one-sided, and a desire for FX moves to be stable and to reflect fundamentals etc. Officials wouldn't comment on whether intervention had take place through Thursday's US session, nor would they discuss the reported rate check.
• Elsewhere, NZD/USD was weaker in early trade, following a very weak PMI update (to multi year lows). Card spending figures also showed a decline in June. We got to lows of 0.6076, but have recouped losses to sit back at 0.6100 in latest dealings. The AUD/NZD cross got to fresh highs of 1.1118, but is now back under the 1.1100 level.
• AUD/USD has drifted higher, last around 0.6770, but hasn't tested Thursday intra-session highs close to 0.6800. China commodity import volumes slowed in June, with iron ore off over 4% but this hasn't impacted sentiment today.
• Looking ahead, the main focus will US PPI and prelim UMich sentiment and inflation expectations data round off the week’s calendar.