USD Slips, As Yields Soften, JPY & NZD Outperform

The USD has tracked lower through today's session, with the BBDXY back sub 1255, around 0.25% off NY closing levels. JPY and NZD have been the standouts, while lower US cash Tsy yields, led by the belly of the curve have been a broader USD headwind.

• USD/JPY hit lows of 133.50, but is now back near 133.65, still +0.60% for the session in yen terms. Post yesterday's Asia close we saw the dip sub 133.50 supported, so this may be a short-term support point. Next year the focus will be on the BoJ policy outlook, with Reuters reporting that ex BoJ Deputy Yamaguchi (who opposed Kuroda's stimulus program) is a potential contender to replace Kuroda.
• NZD/USD is up 0.50%, last near 0.6345. Yesterday's highs came in just above 0.6355. The NZD hasn't been affected by the negative tone to regional equities, while AUD/NZD downside has likely helped at the margin. The cross is back to 1.0640, after reaching 1.0766 yesterday.
• AUD/USD is up around 0.2%, tracking 0.6750 currently.
• Event risk is relatively limited for the offshore session, with the ECB publishing its monthly Economic Bulletin. In the US, jobless claims are on tap.