Yen Underperforms, AUD/JPY Back To 91.00 Handle

Yen was a laggard to start the week, dipping 0.31% for Monday's session, underperforming the rest of the G10, particularly commodity currencies. We got to 136.30/35 not long after the Asia close, before pulling back to 135.70/75, this dip was supported though. We spent most the NY session above 136.00, which is where we currently track.

• US yields held higher, with the 10yr near 3.50%, while the 2yr is above 4.00%. There was a brief dip lower on the US Empire manufacturing miss, but this was short lived. Some Fed commentary noted the central bank has more work to do on inflation.
• The supportive yield backdrop, coupled with better US equity sentiment weighed on yen sentiment, reducing safe haven appeal.
• Spot commodity prices recovered some ground, which aided the commodity FX bloc. AUD/JPY got to back to the 91.00 handle (last 91.10/20), against recent lows sub 90.00.
• The local data calendar is quiet today. Late yesterday the MNI policy team noted that the BoJ may upgrade the inflation outlook, but this is unlikely to lead to any policy tweaks in the near term (see this link).