Yen Weakens, A$ Stabilizes, But Broader USD Index Unchanged

Outside of yen weakness and the modest A$ recovery, G10 FX markets have been fairly muted today. The BBDXY sits just above 1226, little changed versus end Tuesday levels.

• In the cross asset space, US yield trends have been broadly steady, while US equity futures sit down a touch. Regional equities are weaker, except for Japan, where the Nikkei is +2%.
• The weaker yen, which got close to 145.00 in early dealings (last 144.80/85), is aiding the local equity backdrop. Earlier data showed Nov real and nominal wages coming in well below expectations, which may keep the BoJ dovish in the near term.
• AUD/USD has recovered some ground, back above 0.6700, after underperforming on Tuesday. Nov monthly CPI data was a touch weaker than expected and suggested limited hawkish developments for the RBA. NZD/USD sits a touch higher at 0.6240/45.
• In the commodity space, iron ore is holding close to recent lows, around $134.75/ton, although copper is a touch higher.
• Looking ahead, potential comments from Bank of England Governor Andrew Bailey and a 10-yr treasury auction the only other notable risk events for the rest of the session.