USD Steady Amid Mixed Cross-Asset Trends

The BBDXY USD Index sits little changed for Thursday trade to date, last near 1256.5. We firmed in earlier dealings but there was little follow through. Higher US yields have been offset at the margin by a better China/HK equity backdrop and firmer China import data, which has aided higher beta FX.

• USD/JPY fell to 155.17 in early dealings as hawkish headlines from the BoJ Summary Of Opinions (April meeting) crossed. Of note was one member stating that the rate path could be higher than expected. We also had fresh verbal FX intervention warnings from the authorities.
• BoJ Governor Ueda was also before parliament and stated the central bank will closely monitor the impact of the weak yen from a policy standpoint.
• Still, USD/JPY dips were supported, and we track near 155.55/60 in recent dealings. We made marginally fresh highs compared to Wednesday levels of 155.70.
• Japan data on wages was mixed with headline outcomes weaker than expected but on a same sample painted a more resilient picture. FX reserves data showed a drop in April, but this may have reflected valuation effects rather than intervention, which took place towards the end of the month and may not be reflected in today's data.
• AUD and NZD have tracked relatively tight ranges. Both currencies were weaker earlier, but sit slightly higher now, aided by the China import beat and better equity tone for China/HK markets. AUD/USD was last 0.6580/85, while NZD/USD was close to 0.6005.
• Later the Fed’s Daly appears and US jobless claims are released. The BoE decision is announced and the ECB’s de Guindos, Cipollone and McCaul speak as well as BoC’s Macklem and Rogers.