Yen, Sterling Lose Ground

The yen went offered despite the absence of any major headline catalysts, with broader awareness of policy outlook divergence between the BoJ and its major peers lingering in the background. BBG trader sources pointed to leveraged short-covering in USD/JPY amid an uptick in U.S. Tsy yields. The rate extended gains over the Tokyo fix.

• Sterling showed some weakness amid continued escalation in the UK-EU stand-off over the Northern Ireland protocol.
• Commodity-tied FX found some poise as crude oil traded on a firmer footing. The NZD led gains as New Zealand eased restrictions in Auckland and confirmed that its largest city is on track to exit lockdown by month-end.
• USD/CNH operates on a slightly firmer footing, even as China's trade surplus surged to a record amid robust overseas demand for Chinese goods. Imports growth was slower than expected.
• A dearth of notable data releases today will be compensated by central bank rhetoric from Fed's Powell, Clarity, Harker, Bowman & Evans, ECB's Lane & Makhlouf as well as BoE's Bailey.