Yen Leading G10 Rebound Against The USD As Ueda Speaks

The USD is unwinding some of Thursday's s gains in the first part of Friday Asia Pac trade. The BBDXY index was last off around 0.15% to 1233.

• Yen is leading gains at this stage, up around 0.50%. This puts USD/JPY back to the 145.60 region. Attention is very much on BoJ Governor Ueda's appearance before parliament.
• Ueda has been fairly balanced in his comments so far, noting the central bank will watch market developments closely and be mindful of how it communicates it views to the broader public/market.
• Still, Ueda stated that short term rates are still very low and that if the economy is in good shape rates can be raised further (RTRS). He did add there is much uncertainty as to where neutral rates rest in Japan though.
• Ueda has also added that the weaker yen added (somewhat) to upside inflation risks at the July policy meeting. This comment, along with scope to raise rates from very low levels further, is benefiting yen.
• Earlier on the data front we had July national CPI close to expectations. Market sentiment was unmoved.
• Elsewhere, AUD and NZD are both higher as well. NZD/USD last near 0.6155, up 0.30%, unfazed by a weaker than expected Q2 retail sales volume print. AUD/USD is trailing modestly, last near 0.6715 (up 0.15%).
• Outside of watching Ueda's tone before Japan parliament, the data calendar/event risks are very light for the remainder of the Asia Pac session.
• In the cross asset space, US yields are lower, led by the front end, with the 2yr back sub 4% and down nearly 3bps. US equity futures are mostly higher as well. These shifts will be weighing on USD sentiment as well.