Yen Pares Gains, Kiwi Pressured

The Yen has pared gains seen after Fitch downgraded the US from AAA to AA+. The downgrade echoes a similar move made by S&P in 2011. Kiwi is pressured after New Zealand's Unemployment Rate ticked higher in Q2 and wages growth slowed.

• USD/JPY now sits above the ¥143 handle firming off the early session lows at ¥142.75. The Yen firmed alongside EUR and CHF in early dealing after the Fitch decision was published. Support comes in at ¥140.89 (50-Day EMA), resistance is at yesterday's high ¥143.47.
• Kiwi remains pressured and has marginally extended losses in recent dealing. NZD/USD sits at $0.6125/30 ~0.3% lower. The pair sits at touch above support at $0.6121, the low from July 28. A break through here opens the low from Jun 28 ($0.6051) and year to date lows ($0.5985).
• AUD is marginally softer however ranges remain narrow with little follow through thus far. AUD/USD sits above the $0.66 handle, key support is at $0.6596.
• Elsewhere in G-10 CHF has pared gains and sits ~0.2% firmer and EUR is up ~0.1% having been up as much as 0.25% in the aftermath of the Fitch decision.
• Cross asset wise; e-minis are down ~0.3% and continue to pare early losses of as much as 0.6%. US Tsys are ticking away from session highs however yields remain a touch softer. BBDXY is down ~0.1%.
• There is a thin docket on Wednesday, the next macro risk event is tomorrow's Bank of England rate decision.