Yen Extends Losses Amid Higher U.S. Tsy Yields

Yen weakness persisted in Wednesday's Asia trade as U.S. Tsy yields kept pushing higher. BBG trader sources cited USD/JPY purchases by CTA and real-money accounts, with demand seen into and after the Tokyo fix. In addition, upticks in all three main e-mini futures reduced the yen's safe haven allure. Spot USD/JPY pierced Y129.00, rising to best levels since May 18 in tandem with its 1-month 25 delta risk reversal.

• BoJ Dep Gov Wakatabe said that the central bank should not rule out additional easing steps if downside risks to the economy materialise.
• Firmer U.S. Tsy yield allowed the U.S. dollar to outperform, but the BBDXY index struggled to rip through yesterday's peak.
• Above-forecast Australian Q1 GDP data supported the AUD, although to a limited degree, with sell-side economists noting the challenges facing the economy going forward.
• The kiwi dollar retreated as AUD/NZD climbed to a one-week high, with AU/NZ 2-year swap spread advancing.
• Spot USD/CNH turned bid ahead of the release of China's Caixin M'fing PMI and extended gains thereafter. The index improved to 48.1 in May but remained in contractionary territory and slightly missed expectations.
• PMI data from across the globe will keep hitting the wires through the day. Elsewhere, the BoC will announce its monetary policy decision, while a number of Fed, ECB, BoE & Riksbank members are set to speak.