Lower US Yields Help Yen Shrug Off GDP Contraction

The BDDXY sits little changed for the first part of Thursday trade. We were last near 1247.8. Yen strength has been evident, particularly at the expense of AUD, although AUD/JPY is up from session lows.

• Yen shrugged off an earlier Q4 GDP miss, which left the country in a technical recession for the second half of last year. USD/JPY got to highs of 150.58 but we now sit back at 150.15 close to session lows.
• A further pull back in US yields, led by the back end (10yr -2bps to 4.23%) has aided the yen. US equity futures are little changed.
• AUD/USD was weighed down by weaker Jan jobs data, which showed the unemployment rate ticking higher to 4.1%. We got to 0.6478, but now sit at 0.6485, only marginally weaker for the session.
• NZD/USD has remained rangebound today, currently trading at down 0.04% to 0.6084. Heading into a busy US session for data, important levels to watch are, 0.6040 (lows from Feb 5th) a break below here could signal further weakness, potentially opening a move to 0.6000 (lows from Nov 22nd). Currently, the 20 and 50-day EMAs are positioned at 0.6115/6135.
• The AUD/NZD cross was supported on dips to 1.0650, the pair last near 1.0660.
• Looking ahead, the Fed’s Waller speaks on the US dollar, ECB’s Lagarde and Lane and BoE’s Mann and Greene also speak. Retail sales, trade prices, Philly & Empire indices, jobless claims, IP and NAHB housing index all print in the US. UK Q4/December GDP, IP and trade are released.