Yen Gains Dominate G10 FX, EUR/JPY Sub 170, Commodity Price Falls Continue

Yen remains the standout performer in G10 FX, up just over 0.90% for Tuesday's session. The rest of the G10 faltered against the USD, with losses most prominent for high beta plays (NOK, SEK and AUD). The BBDXY USD index rose 0.16% to 1257.25. USD/JPY tracks near 155.60 in early Wednesday dealings, around end NY closing levels from Tuesday.

• Focus remains on commodity losses. Global growth dynamics remain key, with concerns around the Chinese economy weighing heavily on sentiment in this space. The Bloomberg aggregate commodity index down 0.62%, having fallen 10 out of the last 12 sessions, while the metals sub index lost 0.85% Tuesday, its seventh straight decline.
• AUD/JPY is now sub 103.00, back to early June levels and nearly 6% off its recent peak. EUR/JPY was another prominent mover through Tuesday trade, breaking below major psychological support at the 170.00 mark. This leaves us below the 50-dma - a hard-worn support that successfully contained weakness on several occasions over the past few months.
• Some equity softness also likely helped the yen at the margins, with the SPX off 0.16%, with earnings releases in focus. US yields were softer at the front, 2yr back to 4.49% (softer housing data weighing at the margins).
• For USD/JPY we are close to the July 18 low (155.38, the June 4 low is at 154.55). Recent highs rest at 157.86.
• On the data front today we have preliminary July PMIs for Japan today. This is followed by pivotal prelim PMI data from the Eurozone, UK and US later on, which will help inform the global outlook.