USD/JPY Spikes, USD Unwinds Early Session Weakness

It's been a volatile start to the week in currency markets. GBP/USD rose nearly 1% in early trade, as Boris Johnson bowed out of the U.K PM race. We go above 1.1400, but have now unwound a good chunk of these gains (last at 1.1320).

• Part of the unwind likely reflects the spike in USD/JPY. The pair was last above 149.30, +1.1% on NY closing levels. A raft of comments from Japanese officials has had little impact on sentiment so far (Kanda has stated that the authorities monitor and can react in the FX space 24 hours a day, every day of the year).
• He added intervention data will be released at the end of the month, while Suzuki declined to comment on whether the authorities intervened or not on Friday.
• US equity futures are sharply higher (Eminis +0.80/0.85%), but this isn't benefiting high beta FX too much.
• AUD/USD is lower, no able to sustain earlier gains above 0.6400, the pair last tracking under 0.6370. Preliminary PMI readings for October showed the services sector is contracting, down to 49.0 from 50.6. RBA's Kent also played down worries over the weaker AUD driving up imported inflation.
• USD/CNH is the other big move, +0.60% to the 7.2750 region so far today. The USD/JPY rebound will have been a factor, but the market may also be positioning for some weakening in the fixing trend post the Party Congress.