Yen Gains Amid Lower U.S. Tsy Yields, PBOC Repeats Pushback Against Yuan Depreciation

The yen took the lead, extending gains over the Tokyo fix, in a slight correction of yesterday's rout. Its outperformance was not disturbed by the fact that e-mini futures turned bid, albeit China tech equities were softer. A tad lower U.S. Tsy yields likely provided some support to the yen, given the strong correlation between U.S./Japan yield gap and USD/JPY price action.

• In the latest round of jaw-boning, Japanese FinMin Suzuki said that the authorities will monitor moves in U.S. monetary policy and markets.
• Weak iron ore prices and domestic construction data weighed on the Aussie dollar. Building approvals in Australia shrank 17.2% M/M, missing the consensus call for a 3.0% contraction by a notable margin.
• The kiwi dollar was the second-worst G10 performer, taking its cue from the Antipodean cousin. AUD/NZD extended its move away from recent cyclical highs and tested the NZ$1.20 mark.
• The PBOC delivered another pushback against yuan depreciation via a stronger than expected fixing of the USD/CNY mid-point (~250-pip error). Offshore yuan got only brief reprieve and USD/CNH bounced back shortly after.
• German CPI, EZ sentiment gauges and U.S. Conf. Board Consumer Confidence take focus on the data front today.
• Comments are due from Fed's Williams & Barkin, ECB's Vasle, Holzmann, Stournaras, Wunsch & Muller as well as Riksbank's Ingves.