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Risk Appetite Sours, Yen Turns Bid


Participants have turned cautious again as Friday's appetite for riskier assets has evaporated, with U.S. e-minis slipping into negative territory. The yen has taken the lead, with spot USD/JPY shedding ~60 pips thus far.

  • The summary of opinions from the BoJ's most recent monetary policy meeting, which echoed the Board's familiar train of thought re: inflation. One member said the Bank should pay "due attention" to FX market developments.
  • USD/JPY 1-month risk reversal extended its decline deeper into negative territory on Friday even as the spot rate edged higher. A further dip this morning points to intensifying bearish sentiment among options traders.
  • Antipodean currencies pace losses in G10 FX space as New Zealand financial markets re-open after a long weekend. AUD/JPY is close to erasing the prior day's advance, testing Y93.00 figure as we type.
  • Looking ahead, China will publish industrial profits data, while the U.S. will report pending home sales & flash durable goods orders today. Comments are due from ECB's Lagarde & Villeroy.

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