USD/JPY Shows Below Its 50-DMA Before Erasing Losses

The early round trip in USD/JPY provided the highlight of the otherwise muted start to the Asia-Pac session, from an FX perspective. The pair extended overnight losses, finding support at Y145.20 as it tested the water below its 50-DMA for the first time since mid-August. It clawed back all losses into the Tokyo fix in sync with the BBDXY index, with little in the way of Japanese headline flow to drive the rebound.

• Trader sources told Bloomberg that USD/JPY was offered by Tokyo-based leveraged accounts, which brought FX option strikes at Y145.00 into focus. The pair's recovery may have been facilitated by light selling of U.S. Tsys in early cash Tokyo dealing, with yields last 0.9-2.1bp higher across the curve.
• Spot USD/CNH has edged higher on renewed greenback strength, with the PBOC fix coming up in 10 minutes' time. China's inflation figures that headline the Asia-Pac data docket today will be released shortly thereafter.
• Final U.S. wholesale inventories will take focus after hours. Today's central bank speaker slate features Fed's Williams & Barkin, BoE's Haskel & Cunliffe, ECB's Elderson & RBA's Bullock.
• The U.S. midterm elections remain under the microscope as the results keep coming in.