USD Off Lows, JPY Remains A Laggard

The USD has started the week off on the back foot, but dollar indices are up from session lows. The BBDXY last around 1222.90 (-0.15%), versus a low of 1221.10. US cash Tsy yields were firmer at the open but have reversed course through the session, now -1-2bps weaker across the curve. Regional equities, for those markets that are open, are mostly higher, but US futures are slightly down (-0.10%).

• USD/JPY remains somewhat volatile, with dips in the pair supported. We got close to 129.00, but now sit higher at 129.75/80. There was interest in the BoJ 5-yr loan operation, although it looks as though the rate remained positive. The Dec BoJ minutes didn't cause sentiment to shift. US-JP 10yr swap spreads remain skewed in favor of higher USD/JPY levels.
• Yield momentum remains in favor of EUR/USD tough. The pair broke above 1.0900 and sits just below this level currently. This is highs back to April last year. GBP/USD has also firmed, last around 1.2425, also multi-month highs.
• AUD/USD is back within sight of 0.7000, last around 0.6985/90. Metal commodities are higher, but no doubt liquidity is impacted by LNY holidays for China and other markets like Singapore.
• NZD/USD outperformed early but is now back at 0.6475/80, highs for the session were at 0.6500.
• Coming up, there is some ECB speak, including Lagarde, while on the data front its second tier released.