Yen Firms Against Higher Beta Plays

USD indices sit little change versus closing levels from the end of last week. The BBDXY is under 1246.50 currently. This masks some divergences within the G10 complex, with JPY generally outperforming higher beta plays within the space.

• This is most evident in terms of AUD/JPY, which is down around 0.4% for the session so far. This puts us back at 91.60/65.
• AUD/USD is back to 0.6750/55 but is up from session lows (close to 0.6740). The A$ has weakened with lower metals prices, most notably iron ore, which is off over 2% (near $122.50/ton). This comes after some disappointment around China's 5% growth target for 2023 announced yesterday. Late last week speculation had been of a target higher than this.
• NZD/USD us also weaker, but outperforming the A$ at the margins. The pair last around 0.6210/15. Data releases in both AU and NZ didn't shift the sentiment needle.
• USD/JPY got to a low of 135.37, but has recovered, now back to 135.65, which is around 0.15% sub closing levels from last week. Lower US yields, (-0.5 to -1.8bps lower across the US cash Tsy curve) has aided the yen.
• Other pairs have seen modest moves, with EUR/USD slightly higher, tracking in the 1.0645/50 area.
• Looking ahead, Swizz Feb CPI is on tap, while the ECB's Lane also speaks. In the US, factor orders and the final durable goods print are out. There is no Fed speak scheduled ahead of Chair Powell's testimony tomorrow.