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FOREX: USD Modestly Higher, Yen Pares Losses Post FinMin Warning

FOREX
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Early G10 FX trends are skewed towards the USD, albeit with modest moves overall. AUD and NZD are seeing some slight underperformance (which followed some outperformance on Monday). Rhetoric around FX moves has crossed from the Japan FinMin as well. 

  • The reaction so far from USD/JPY has been limited. We were last 157.15/20, close to unchanged for the session. Earlier highs were at 157.39.
  • Japan FinMin Kato reiterated recent concerns on FX - "JAPAN FINMIN KATO: CONCERNED ABOUT RECENT FX MOVES, RTRS" "JAPAN FINMIN KATO: RECENTLY SEEING ONE-SIDED, SHARP FX MOVES" and that the authorities will take action against excessive moves.
  • USD/JPY is still sub post BoJ highs (157.93), with these comments highlighting intervention risks as we approach the holiday period. Earlier the BoJ minutes from the Oct policy meeting came and went with little market reaction.
  • AUD/USD sits down around 0.20%, last near 0.6235/40. Downside focus will rest on the 0.6199 low seen recently. The RBA minutes from the Dec meeting were out earlier. Upside risks to inflation have diminished but it was still too soon to be confident that inflation is sustainably at target.
  • NZD/USD is also lower, last near 0.5635/40. Also, still up from recent cycle lows.
  • Trends are biased in favour of the USD elsewhere, but aggregate moves are modest. In the cross asset space, US equity futures are down a touch, along with US yields, but again overall moves are modest.
  • There is little in the way of further risk events for the remainder of today's Asia Pac session. 
     
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Early G10 FX trends are skewed towards the USD, albeit with modest moves overall. AUD and NZD are seeing some slight underperformance (which followed some outperformance on Monday). Rhetoric around FX moves has crossed from the Japan FinMin as well. 

  • The reaction so far from USD/JPY has been limited. We were last 157.15/20, close to unchanged for the session. Earlier highs were at 157.39.
  • Japan FinMin Kato reiterated recent concerns on FX - "JAPAN FINMIN KATO: CONCERNED ABOUT RECENT FX MOVES, RTRS" "JAPAN FINMIN KATO: RECENTLY SEEING ONE-SIDED, SHARP FX MOVES" and that the authorities will take action against excessive moves.
  • USD/JPY is still sub post BoJ highs (157.93), with these comments highlighting intervention risks as we approach the holiday period. Earlier the BoJ minutes from the Oct policy meeting came and went with little market reaction.
  • AUD/USD sits down around 0.20%, last near 0.6235/40. Downside focus will rest on the 0.6199 low seen recently. The RBA minutes from the Dec meeting were out earlier. Upside risks to inflation have diminished but it was still too soon to be confident that inflation is sustainably at target.
  • NZD/USD is also lower, last near 0.5635/40. Also, still up from recent cycle lows.
  • Trends are biased in favour of the USD elsewhere, but aggregate moves are modest. In the cross asset space, US equity futures are down a touch, along with US yields, but again overall moves are modest.
  • There is little in the way of further risk events for the remainder of today's Asia Pac session.