Yen Falters On Firmer E-Minis, Gotobi Day Flows

The yen went offered into the Tokyo fix and continued to underperform G10 peers thereafter. Gotobi day flows were the usual local suspect, but it is worth noting that Japan moved to extend quasi-emergency measures to eight more prefectures after reporting another record increase in daily Covid-19 cases. USD/JPY moved past yesterday's high, as U.S. e-minis and Japanese equity benchmarks edged higher in relatively muted Asia-Pac trade.

• Fed's Daly said inflation readings don't suggest that the Fed should change course and she expects later this year or early next year to be the appropriate time to taper. The DXY ground higher, building on gains registered after yesterday's round of hawkish comments from Fed Vice Chair Clarida.
• G10 high betas drew support from a generally firmer commodity complex and better risk appetite. The AUD outperformed even as iron ore retreated amid recent signs that China could tighten output curbs at steel mills.
• Spot USD/CNH remained rangebound, with an in-line PBOC fix giving it no clear directionality.
• The main risk even today is the Bank of England MPC meeting, with German factory orders and U.S. weekly jobless claims also due. Fed's Waller and Kashkari are set to speak.