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Yen Takes Lead On Risk Aversion, Hawkish BoJ Chatter


Risk-off flows have been evident in G10 FX price action as Asia-Pac equity benchmarks declined, taking their cue from Thursday's tech-driven equity rout on Wall Street. More hawkish talk from Fed members is not doing risk assets any favour.

  • Worth adding that the PBOC may have disappointed some participants by leaving the interest rate applied to their MLF operations unchanged. There was speculation that the People's Bank could deliver a modest cut today, with Bloomberg Economics flagging such a possibility.
  • The Antipodeans lead losses as investors shy away from riskier currencies, while the yen sits atop the G10 pile on better demand for safe havens. A RTRS report noting that the BoJ are discussing how to begin messaging on an eventual interest rate hike might be lending some incremental support to the yen.
  • China's monthly trade report may hit the wires at any point from now, while other data highlights today include UK economic activity indicators as well as U.S. industrial output & retail sales. The central bank speaker slate features Fed's Williams, ECB's Lagarde & Riksbank's Ingves.

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