JPY Brings Up The Rear

The greenback trades a touch lower against the majority of its G10 FX peers. Asia-Pac hours saw the U.S. effectively note that Polish airforce planes would not be welcome at one its German army bases after Poland made an offer to bolster the Ukrainian armory on Tuesday, although talks between the U.S. & Poland are ongoing (perhaps in relation to the potential deployment of patriot missiles to Poland, which was sketched out by U.S. officials on Tuesday).

• The exception to the broader rule was the JPY, which finds itself at the foot of the G10 FX table. A combination of softer than expected final Japanese GDP data, Japan’s susceptibility to higher crude prices, a light uptick in e-minis/local Japanese stocks and talk of importer-related flows in USD/JPY weighed on the JPY. USD/JPY is ~15 pips higher, printing just above Y115.80. The rate showed above initial technical resistance before backing off. Bulls ultimately look to key resistance in the form of the Feb 10 high/Jan 4 high & bull trigger (Y116.34/35).
• EUR/USD managed to add ~25 pips but sticks within the range observed during the first half of the week, printing $1.1925.
• AUD/USD nudged higher on the USD downtick, with nothing in the way of immediate reaction to the latest round of RBA communique. Governor Lowe seemed to embed further optionality into the timing of the Bank’s cash rate lift off, although he continued to point to the RBA’s ability to be patient.
• Chinese inflation data failed to impact the wider G10 FX space, while USD/CNH stuck to a narrow range.
• There isn’t much in the way of notable risk events slated for Wednesday, with U.S. JOLTS job openings perhaps providing the highlight. It will be a case of headline watching, with focus already moving to Thursday’s ECB meeting & U.S. CPI data.