USD Offered Modestly, USD/JPY Dips Supported Though

The USD is slightly lower in the first part of trade, the BBDXY back to 1221.60, against a Friday close of 1222.20. JPY is the main exception, with USD/JPY's early dip supported, the pair now back to 130.00/05 (against an early low of 129.67). Still, we remain well within recent ranges.

• In the cross asset space, modest cheapening is evident for US Treasuries, with yields 1.6-2.3bps higher across the curve (led by the 2yr). This has likely weighed on yen at the margins. Equity futures are down slightly for the US but away from worst levels.
• NZ trade figures showed an improvement in the trade deficit, but the deficit still ended 2022 around double the 2021 figure (NZ$14.5bn, versus NZ$7.1bn). NZD/USD is slightly higher, last near 0.6500, with moves above this level drawing selling interest over the past week.
• AUD/USD, along with NOK, is outperforming, +0.20% to 0.7115/20. China markets return today, with growth optimism high post the LNY break. Highs from last week came in close to 0.7145.
• The event/data risks are fairly light for the rest of the Asia Pac session.