Yen Fluctuates, Antipodeans Gain In Quiet Asia Session

USD/JPY wavered between gains and losses, holding a 70-pip range in a catalyst-light Asia session. The pair lost some altitude over the Tokyo fix, but then recovered in sync with U.S. Tsy yields. The spot rate last deals a dozen pips shy of neutral levels, while USD/JPY risk reversal extended Wednesday's upswing.

• Worth pointing to sizeable USD/JPY option expiries coming up today. There is $1.4bn worth of options with strikes at Y133.00 due to roll off at the NY cut, with a further $2.4bn due to expire at Y134.80-00.
• Price action of USD/JPY showed strong correlation with broader greenback strength. The BBDXY index is back to virtually neutral levels and last sits at 1,272, holding yesterday's range in Tokyo trade.
• The Antipodeans took the lead, even as U.S. e-mini contracts struggled to return into positive territory. The AUD shrugged off Australia's widest trade surplus on record, underpinned by an expectation-busting growth in exports.
• The kiwi dollar outperformed at the margin, possibly supported by reflections on the state of New Zealand's labour market ahead of this month's RBNZ policy review. While data released yesterday showed an unexpected uptick in the unemployment rate, wage inflation remained hot.
• Most sell-side analysts expect the BoE to raise the bank rate by 50bp today. Our Markets Team assigns a subjective 70% probability to a half-percentage point hike (with a 25bp hike if not).
• Today's data highlights include German factory orders as well as U.S. jobless claims & trade balance. Fed's Mester will discuss the economic outlook.