USD Rises From Fresh Lows, JPY Outperforms

Early USD selling had little follow through, with the USD BBDXY now back to 1228.30, +0.15% firmer for the session. A firmer US cash Tsy yield backdrop has helped (+2.5bps for the 10yr), while US equity futures have also faltered weighing on higher beta plays. Still the BBDXY is down 1.34% for the week and not too far off fresh lows.

• USD/JPY hit fresh lows sub 128.70 in the first part of trading, but has rebounded back above 129.00 and has spent the rest of the session above this level (last 129.20/25). The yen has outperformed the rest of the G10 though, with markets keeping one eye on next week's BoJ meeting.
• AUD/USD is back under 0.6950, around 0.30% down from NY closing levels. We haven't drifted too far away from this level, with higher iron ore prices (near $125/ton) providing some offset. China commodity import data showed softness (ex oil), but trends are expected to be better in 2023.
• NZD/USD has been the worst performer in the space so far today, off 0.50% to the low 0.6360 region. 0.6400 remains a resistance point for now.
• Coming up UK monthly GDP is due, while in the US U. Of Mich. Sentiment is out, along with Fedspeak from Kashkari and Harker.