JPY Grinds Lower On Gotobi Day, U.S. Tsy & Fed Clash Over Stimulus Funds

Conflicting opinions of U.S. Tsy & Fed on whether to unwind the central bank's emergency lending facilities inspired light risk aversion early on, which gradually faded away through the session. Outgoing Tsy Sec Mnuchin requested the return of unused cash from some lending programmes run by the Fed, which replied that it prefers to keep "the full suite of emergency facilities". Subsequent headline and data flow was lacklustre and provided little to move the needle, with the PBoC leaving its LPRs unchanged. JPY faltered, possibly on the back of Gotobi Day sales against USD, ahead of a long weekend in Japan.

• USD/CNH swung to a loss as the greenback shook off its initial strength, even as the PBoC set its central USD/CNY mid-point higher than expected.
• The Bank of Thailand unveiled measures to stem THB appreciation and reiterated its concern with the current level of the exchange rate.
• Today's highlights include UK & Canadian retail sales, EZ consumer confidence, as well as comments from Fed's Kaplan, Barkin & George and ECB's Lagarde, de Guindos & Weidmann.