Yen Slumps 2% On Dovish BoJ Comments, Broader Risk Recovers Further

Recent safe haven FX gains have continued to be unwound today. Yen losses are over 2%, as the dovish rhetoric from the BoJ Deputy Governor weighed heavily on yen. These comments also helped fuel broader risk gains. Regional equities and US futures are continuing to recover from recent lows. Japan equities have been the strongest gainers.

• USD/JPY is close to 147.7 in recent dealings, very close to session highs. We stared the session around 144.35. Upside focus may rest on pre NFP highs, which came in around 149.10 last Friday.
• BoJ Deputy Governor Uchida stated, that rates won't be raised if the market is unstable and the rate path will shift if market moves affect the economic outlook (per BBG). This offset earlier comments that rates would continue to rise if projections unfolded as expected.
• It also follows yesterday meeting between the BoJ/FinMin and the FSA, where recent volatility in Japan financial markets was clearly a focus.
• High beta FX has outperformed, led by the NZD following the earlier Q2 jobs beat. This has seen RBNZ easing expectations for next week's meeting slashed to 43% from 78% prior.
• NZD/USD is up 1% to 0.6015, AUD/USD at 0.6560/65 is 0.65% higher, so lagging NZD. The AUD/NZD cross is at 1.0910/15, near recent lows. NZD/JPY has rebounded +3%, last near 88.90.
• Looking ahead, the data calendar is fairly light for the offshore session, with just second tier releases out.