Yen Underperforms USD Pullback, BoJ Nominations In Focus Today

Yen was the weakest performer through Monday's session within the G10 space. Indeed, yen was the only major currency to slide against the USD for the session, losing 0.80%. USD/JPY touched a high of 132.91 in NY trade, before some selling interest emerged. We are now back around the 132.40/45 level.

• Yen was weighed on a relative value basis by the rebound in equity sentiment, with higher beta plays like NZD, AUD and SEK noticeable outperformers on a cross basis. NZD/JPY surged back towards 84.50.
• The yen didn't get much relief from a slightly lower US backdrop, although it has been playing some catch up on this front in recent sessions, so this may have limited the impact of the pullback for the yen. The US-JP 10yr swap spread edged down to +253bps from +256bps at the end of last week.
• Locally, Kazuo Ueda is expected to be presented to parliament at 11am local time (02:00 London) as the new BoJ Governor. The market will be looking for hints around BoJ policy direction, although Ueda stated that easing is still appropriate. These comments helped unwind the yen bounce post the media reports he would be announced as the new Governor.
• On the data front, Q4 GDP prints. The market expects +0.5% q/q, versus -0.2% prior. Final Dec IP figures print later.