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USD/JPY Recovery Continues, A$ Outperforms

FOREX

The main theme today has been yen weakness. USD/JPY has continued to recover, with the pair getting to a high of 134.40 before selling interest emerged. We are now back close to 134.00, still 0.40% weaker for the yen since the open. This has helped keep the USD indices slightly higher, with the other majors tracking tight ranges. The BBDXY was last just under 1254.70.

  • Weighing on the yen was the BoJ Opinion Summary from the last policy meeting, which pushed back against any premature moves away from ultra-easy monetary policy conditions. Yield differentials are also tracking in the USDs favor. China's rapid move away from CZS is at risk of being inflationary, which is aiding the US cash Tsy yield move higher.
  • Commodities are also generally supported, with oil holding close to recent highs (Brent last near $84.40), while copper has nudged up to $384.20. The A$ has outperformed, up nearly 0.30%, last just off session highs at 0.6745. AUDJPY is back close to 90.50.
  • The AUD/NZD cross is back at 1.0760, fresh highs since the start of the month. NZD/USD is near 0.6270, slightly down for the session, but up from earlier lows just under 0.6260.
  • Looking ahead, the main focus will be on US data out later, with the Richmond Fed index and pending home sales due.
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