USD/JPY Eyeing 140.00 Break Amid US Yield Pullback, NZD Lagging

Modest USD selling continues, with the BBDXY down sub 1244, -0.15% for the session to date. A softer US yield backdrop appears to be weighing from a cross-asset standpoint. The 2yr is back to +1bps firmer, we were +3.3bps higher in early trading. Back end yields remain lower, the 10yr yield now sub 3.76%.

• This has aided yen, with USD/JPY briefly dipping sub 140.00 (low 139.97), we now sit slightly higher. There is a chunky option expiry tomorrow at 140 ($1.72bn), so that may influencing spot behavior to a degree.
• BoJ Governor Ueda has appeared before parliament, but hasn't shifted the narrative relative to recent commentary. He noted that exiting from easier policy settings wouldn't mean large JGB losses in terms of the BoJ balance sheet.
• AUD/USD dipped slightly post the building approvals miss, but has been supported. We were last at 0.6550/55, +0.2% higher and just down form session highs.
• NZD/USD is lagging somewhat, currently flat at 0.6055.