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FOREX: Yen Unwinds Some Outperformance Amid Higher US Yields, Tariff Focus Later

FOREX
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Aggregate G10 shifts have been very muted so far in Friday trade. The BBDXY USD index is little changed, holding close to 1304.7, which isn't far off highs that were seen post earlier headlines that US President Trump will impose tariffs on Mexico and Canada tomorrow. Headlines crossed from BBG that Trump will sign executive orders at 3pm ET. 

  • USD/JPY has seen some modest shifts, the pair pull back to 153.92 before support emerged. We were last 154.35/40, little changed for the session. Earlier data showed stronger Tokyo CPI headline pressures, but core measures were close to expectations.
  • US yields have ticked higher, the 10yr up over 2bps to 4.54%, with Trump tariff threats impacting. This has helped stabilize US-JP yield differentials.
  • US equity futures are higher, led by Nasdaq futures as markets continue to digest earnings results.
  • AUD and NZD have ticked higher, but both currencies are sub pre trump tariff headlines. AUD/USD was last 0.6230, while NZD/USD was near 0.5645. AUD/USD has seen support around the 0.6200 level, while NZD has been supported ahead of 0.5620. Data releases in both economies hasn't impacted sentiment.
  • USD/CAD is very steady, last near 1.4480. We got close to 1.4600 late in Thursday trade as tariff headlines crossed. The 1 week risk reversal is very elevated near 2.50, highs back to 2020. Spot USD/MXN sits better within recent ranges, last near 20.68. Its 1 week risk reversal is higher, but within recent extremes.
  • Looking ahead, outside of tariff related risks, we have some German regional inflation data. In the US we have the PCE, along with Fed speak from Bowman. The MNI Chicago PMI also prints.
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Aggregate G10 shifts have been very muted so far in Friday trade. The BBDXY USD index is little changed, holding close to 1304.7, which isn't far off highs that were seen post earlier headlines that US President Trump will impose tariffs on Mexico and Canada tomorrow. Headlines crossed from BBG that Trump will sign executive orders at 3pm ET. 

  • USD/JPY has seen some modest shifts, the pair pull back to 153.92 before support emerged. We were last 154.35/40, little changed for the session. Earlier data showed stronger Tokyo CPI headline pressures, but core measures were close to expectations.
  • US yields have ticked higher, the 10yr up over 2bps to 4.54%, with Trump tariff threats impacting. This has helped stabilize US-JP yield differentials.
  • US equity futures are higher, led by Nasdaq futures as markets continue to digest earnings results.
  • AUD and NZD have ticked higher, but both currencies are sub pre trump tariff headlines. AUD/USD was last 0.6230, while NZD/USD was near 0.5645. AUD/USD has seen support around the 0.6200 level, while NZD has been supported ahead of 0.5620. Data releases in both economies hasn't impacted sentiment.
  • USD/CAD is very steady, last near 1.4480. We got close to 1.4600 late in Thursday trade as tariff headlines crossed. The 1 week risk reversal is very elevated near 2.50, highs back to 2020. Spot USD/MXN sits better within recent ranges, last near 20.68. Its 1 week risk reversal is higher, but within recent extremes.
  • Looking ahead, outside of tariff related risks, we have some German regional inflation data. In the US we have the PCE, along with Fed speak from Bowman. The MNI Chicago PMI also prints.