Yen Regains Poise As Officials Watch It With "Vigilance"

The yen reversed earlier losses as Japan's FinMin Suzuki called sudden FX moves "undesirable" and said that the government would monitor their impact with "vigilance," in what arguably represented marginal strengthening of rhetoric on the matter. Suzuki's comments fell on fertile ground as market participants are assessing officials' tolerance threshold when it comes to yen depreciation after USD/JPY punched through the Y125.00 figure on Monday. A recent analytical piece from ING suggested that the pair could run as high as to Y130.00 without provoking an intervention.

• Spot USD/JPY has slipped into negative territory, but its RSI still points to overbought technical conditions. The yen is the best G10 performer, even if by only narrow margins.
• Major currency pairs have generally held tight ranges, with NZD underperforming as NZIER QSBO, released on the eve of RBNZ monetary policy review, showed further deterioration in business confidence.
• U.S. CPI headlines the global data docket today, with German ZEW Survey & UK jobs market report also due. Fed's Brainard is the only major central bank speaker.