USD Rises Amid Defensive Flows, AUD Erases Gains From Solid Jobs Report

USD paced gains in Asia as regional players caught up with Wednesday's monetary policy decision from the FOMC, while e-minis retreated, stoking demand for safe haven currencies. Resultant risk-off flows bolstered JPY, with continued losses in EUR/JPY lending further support to the yen as a firmer DXY sapped strength from Europe's shared currency. EUR/JPY printed a fresh seven-week low after sliding through some key support levels on Wednesday.

• A stronger U.S. dollar was bad news for the yuan, which ticked away from its best levels vs. the greenback since 2019. The PBoC fix was stronger still, but marginally above the BBG estimate, inspiring little reaction in the FX space.
• Breakdown figure in Australia's labour market report topped forecasts across the board, allowing AUD to come up for air before it dived again. Apparent profit taking in the wake of the post-release rally, persistent risk-off flows and bubbling Sino-Australian tensions kept a lid on the South Pacific currency.
• Likewise, NZD lost ground and snapped its four-day winning streak vs. USD. New Zealand's economic contraction in Q2 was the biggest on record, but that was in line with expectations - the reading was marginally better than market consensus and topped NZ Tsy's forecast.
• Central bank activity has picked up today. The BoJ stood pat on its policy settings, which was widely expected and didn't inspire any notable market moves.
• Bank Indonesia intervened in domestic NDF and FX spot markets to shore up the rupiah ahead of today's monetary policy decision.
• On that note, monetary policy announcements from the BoE, SARB, BI and Taiwan's CBC are awaited today. In addition, central bank speaker slate features ECB's Rehn, Muller & de Guindos. On the data front, final EZ CPI and U.S. initial jobless claims, housing starts and Philly Fed Survey take focus from here.