USD Index Recoups Earlier Losses, As Ueda Comments Weigh On Yen

The USD index (BBDXY) sits unchanged versus end NY levels on Monday, last near 1229.20. We are up from earlier lows (1228.46), after the yen pared its earlier gains, after more balanced comments from BoJ Governor Ueda.

• Overall ranges in the USD index have been fairly tight, with limited volatility outside of USD/JPY moves. In the cross asset space, US equity futures are higher at this stage, led by tech (Nasdaq futures +0.55%). US yields are closed to unchanged.
• USD/JPY dipped in earlier trade, falling to 146.62, which was still above both Friday and Monday intra-session lows just under 146.50. This dip followed news wire headlines from Jiji stating the BoJ would end NIRP if the first round of wage negotiations delivered a 'significantly' bigger rise than last year (3.8%). Friday should see these results known.
• BoJ Governor Ueda though tempered hawkish sentiment at the margins. Appearing before parliament he stated consumption of non-durables was weak, but the economy was gradually recovering. He added the central bank will mull changes if the inflation goal is in sight. USD/JPY sits back near 147.40 in latest dealings, just below session highs (147.44).
• AUD and NZD sit close to unchanged for the session so far. AUD/USD last near 0.6610/15. Earlier comments from RBA Assistant Governor Hunter noted households are under pressure but she didn't touch on the monetary policy outlook. The Feb NAB business survey was mixed, with confidence back to flat, while conditions improved to 10 from 7 in Jan.
• NZD/USD was last at 0.6170. Earlier data showed weak card spending trends for Feb, in line with a softer consumer spending backdrop.
• Looking ahead, Labour market data in the UK kicks off the Tuesday docket before all attention turns to US CPI. Consensus puts core CPI inflation at 0.3% M/M in February with little skew either side. OER inflation will be watched particularly closely, with a surprisingly narrow range across analysts considering the surprise divergence with primary rents data in last month’s report.