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FOREX: Yen Supported By FinMin FX Warning, A$ Down Modestly

FOREX
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The USD BBDXY index sits a touch higher in the first part of Tuesday trade, as markets wind down ahead of the Christmas break. The index was last near 1301.3, so holding Monday gains, but still sub recent cycle highs. 

  • USD/JPY sits off earlier highs (157.39), last testing under 157.00 and close to session lows. Yen sentiment has been aided by fresh rhetoric from the FinMin warning around excessive/one-sided FX moves and that the authorities would respond.
  • The language used echoed comments from last week ("CONCERNED ABOUT RECENT FX MOVES" RTRS) and didn't impact much initially. USD/JPY's move lower has been a steady grind. The comments a likely warning on intervention risks, particularly as lighter liquidity approaches over the holiday period.
  • We also have BoJ Governor Ueda speaking tomorrow.
  • AUD and NZD have drifted a little lower, but recent ranges have held. AUD/USD last down around 0.20%, just under the 0.6240 level. The RBA mins were released, which didn't impact sentiment much, the RBA reiterating that it is too soon to be confident of sustaining inflation within the target range. NZD/USD was last near 0.5645.  
  • This afternoon headlines have crossed from a China fiscal work conference in Beijing. Familiar language has been used around supporting growth next year and increasing bond issuance. Details were light otherwise though.
  • China and Hong Kong equities are higher, but were already firmer prior to these fiscal headlines. Iron ore is still weaker for the session, an AUD headwind.
  • Coming up we just have US data in terms of the Richmond Fed index and Philly Fed non-manufacturing index due before the Christmas break. 
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The USD BBDXY index sits a touch higher in the first part of Tuesday trade, as markets wind down ahead of the Christmas break. The index was last near 1301.3, so holding Monday gains, but still sub recent cycle highs. 

  • USD/JPY sits off earlier highs (157.39), last testing under 157.00 and close to session lows. Yen sentiment has been aided by fresh rhetoric from the FinMin warning around excessive/one-sided FX moves and that the authorities would respond.
  • The language used echoed comments from last week ("CONCERNED ABOUT RECENT FX MOVES" RTRS) and didn't impact much initially. USD/JPY's move lower has been a steady grind. The comments a likely warning on intervention risks, particularly as lighter liquidity approaches over the holiday period.
  • We also have BoJ Governor Ueda speaking tomorrow.
  • AUD and NZD have drifted a little lower, but recent ranges have held. AUD/USD last down around 0.20%, just under the 0.6240 level. The RBA mins were released, which didn't impact sentiment much, the RBA reiterating that it is too soon to be confident of sustaining inflation within the target range. NZD/USD was last near 0.5645.  
  • This afternoon headlines have crossed from a China fiscal work conference in Beijing. Familiar language has been used around supporting growth next year and increasing bond issuance. Details were light otherwise though.
  • China and Hong Kong equities are higher, but were already firmer prior to these fiscal headlines. Iron ore is still weaker for the session, an AUD headwind.
  • Coming up we just have US data in terms of the Richmond Fed index and Philly Fed non-manufacturing index due before the Christmas break.