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Outperforming On Lower US Yields, Softer Commodities

JPY

Yen has climbed to the top of the G10 pile for Monday's session so far. USD/JPY continues to track lower, with the pair last to 135.45/50. This is 0.30% firmer in yen terms since the start of the session (although we are slightly above session lows 135.37). March 1 lows, which came in around the 135.25 level, aren't too far away, while the 100-day EMA is just under 135.00.

  • There doesn't appear any obvious headline catalyst for the moved. US yields are lower, with the US-JP 10yr swap spread off a further 2.5bps today, a continuation of the move from late last week.
  • Cross yen performance is also likely being helped at the margins by softer commodity prices, particularly for metals such as iron ore. AUD/JPY is down to the 91.60/70 region, off by 0.35% so far today. This comes post China's 'around 5%' growth target, which has likely disappointed the market at the margins.

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