Risk Aversion Favours Yen

Light risk-off flows have taken hold in G10 FX space, with liquidity thinned by a public holiday in Japan. Safe havens JPY and CHF outperform after a plunge in U.S. stock indices in reaction to hawkish overtones in Fed Chair Powell's presser, with e-minis extending losses in early Asia-Pac trade. Adding to the cautious tone are reports of fresh missile tests by North Korea, including one suspected ICBM.

• Spot USD/JPY is in retreat, shedding ~50 pips thus far and prompting the BBDXY index to almost erase its initial gains. Regional risk barometer AUD/JPY prints worst levels since Oct 24 as the Antipodeans go offered.
• The Aussie dollar ignored better than expected data, with trade surplus printing at A$12.444bn versus median estimate of A$8.750bn. Imports were flat (against +3% expected), while exports rose more than forecast (+7%, versus +1% expected).
• China's Caixin Services PMI headlines the regional data docket during the remainder of the session. Later in the day, weekly jobless claims, trade balance, factory orders and final durable goods orders are due out of the U.S.
• The central bank marathon continues, with the Bank of England and Norges Bank set to decide on rates. There is plenty of central bank rhetoric scheduled on top of that, particularly from a slew of ECB members, including President Lagarde.