Yen Turns Tail Again, Antipodeans Diverge

Yen sales resumed on Friday with USD/JPY running as high as Y122.73 (more than 1 big figure better off) at its intraday peak. The pair's well-defined technical lines in the sand remained intact, albeit its RSI flirted with overbought territory. The move may have been driven by Tokyo reaction to the BoJ once again re-affirming its dovish credentials via its Q2 Rinban plan, as it looks to exert greater control over the yield curve via more frequent and larger (in cumulative terms) operations after the recent test of its YCC parameters. U.S./Japanese yield spreads widened from both ends in Tokyo trade, with Tsys cheaper and JGBs richer, which likely amplified the impact of yield spread movements. To top it all off, the BoJ's Q1 Tankan survey suggested that sentiment among Japan's large manufacturers deteriorated for the first time in seven quarters, underscoring the need for the central bank to stick to its ultra-loose monetary policy stance.

• Japan's FinMin Suzuki reiterated that sudden moves in FX markets are "undesirable," with officials closely watching their impact on the economy. The official added that the BoJ does not directly target currency rates.
• The Aussie dollar caught a bid after Treasury Secretary Kennedy (who also sits on the RBA Board) said that the balance of risks to inflation outlook were to the upside, pointing to the opportunity for monetary policy to "normalise." AUD/USD climbed to $0.7500 but rejected that round figure and gave away the bulk of its earlier gains, while AUD/NZD crossed above the NZ$1.0800 mark.
• In contrast to its Antipodean cousin, the kiwi dollar went offered. The latest ANZ survey showed that consumer confidence in New Zealand plunged to an all-time low (data begins in 2004) amid rising costs of living, rising interest rates, retreating housing market and spread of Omicron.
• U.S. NFP report provides the main point of note on today's data docket, with flash EZ CPI and a slew of Manufacturing PMI readings also due.
• Comments are due from ECB's de Cos, Centeno, Schnabel, Knot & Makhlouf, Fed's Evans & Riksbank's Ohlsson.