USD Off NY Highs, JPY Firms To 134.00

The early tone for the USD is a softer one, with JPY leading the way. The BBDXY is off by 0.15% at this stage, back under the 1256 level, which is similar to levels that prevailed this time yesterday. Overall ranges remain well within what has been observed in the past 24 hours.

• Not surprisingly, headline flow has been light, while cross asset signals fairly muted. Regional equities are lower, in line with lower offshore moves yesterday amid China covid concerns, but US futures are tracking slightly higher at this stage (+0.10/+0.25%). US cash Tsy yields are down slightly, -0.8/-1.7bps across the curve in the first part of trading.
• USD/JPY has moved away from a break above 134.50, with the pair easing back below the 134.00 level before support kicked in (last 134.05/10). The Yen is still around 0.30% stronger for the session.
• AUD/USD has pushed back above 0.6750, +0.20% firmer. Australia's trade minister expects China to drop trade penalties after Australia offered to remove two cases before the WTO. Like other countries, Australia is also looking at putting in place travel restrictions on arrivals from China.
• NZD/USD is tracking A$ gains, last just above 0.6320.
• Other pairs have seen gains against the USD in the 0.05-0.10% range.
• Event risk remains light for the rest of the Asia Pac session.