Yen Rallies Over 1%, Carry Trades Unwound Amidst Equity Risk Off

USD/JPY got to 153.11 in Wednesday US trade, a fresh low back to early May for the pair. We ended the Wednesday session higher at 153.90, but this was still a gain of 1.1% in JPY terms. Yen was the best performer in the G10 space, which along with CHF (+0.70%), were the only currencies to record rises against the USD, as the risk off theme dominated.

• For USD/JPY, beyond intra-session lows from Wednesday we have 152.78, which is the May 6 low. Note though the RSI (14) has hit its lowest level, just under 30, since the start of this year. We are sub all the key EMAs except the 200-day (near 152.4), while the 100-day sits back up at 155.64.
• Equity sentiment slumped in the US, the Nasdaq down by over 3.6%, amid tech earning concerns. CHF rallied in tandem with JPY, adding more evidence to the argument that carry trade dynamics that dominated much of this year's currency trade are starting to reverse. AUD/JPY and NZD/JPY continued to fall sharply.
• Softer flash manufacturing PMIs for July (US down to 49.5) added to global growth concerns. The aggregate Bloomberg commodity index eased a further 0.20%, the base metals index down 0.64%, for the 9th straight session loss. US yields still finished higher at the back end though, (10yr cash tsys to 4.28%) as the curve steepened.
• We also had a Reuters report that a BoJ hike will be considered next week, while the central bank will also announce plans halve bond purchases over the next few years (see this link).
• Today we have the June PPI services on Tap, along with weekly investment flows. Department store sales print later on.