Yen Weakens Post Ueda Comments, Modest Risk On Elsewhere

The USD index has tracked tight ranges in the first part of Friday trade, the BBDXY last near 1244, which is close to end levels from NY on Thursday. This has masked some divergent trends within the G10 space though, with a risk on tone amid JPY and CHF underperformance.

• Early doors we had comments from BoJ Governor Ueda (in Brazil for the G20). These were cautious/less hawkish compared to remarks by Board member Takata that were made yesterday. The governor noted the inflation goal is not yet in sight and that current spring wage negotiations were key to ensuring a sustainable wage/inflation outlook.
• USD/JPY didn't react initially, but rose later to 150.40 (after opening around 150.00), this is a 0.30% yen loss and puts us back close to levels that prevailed before Takata headlines crossed yesterday.
• A turnaround in US equity futures, which now sit +0.10-0.20% higher has likely weighed on the yen as well. US yields are close to flat at this stage. Comments from the Fed's Williams haven't impacted sentiment greatly.
• AUD/USD sits back near 0.6510, close to 0.20% higher. The firmer equity backdrop has helped, while iron ore prices sit back above earlier lows in the week. (last near $117.2/ton). The AUD/NZD cross has been unable to re-take the 1.0700 handle.
• For NZD/USD, we are off the lows from earlier this morning, trading again in very tight ranges of 20pips (last 0.6090/95. Earlier RBNZ Gov Orr gave a speech in Christchurch, largely reiterating what was mentioned earlier this week at the RBNZ OCR meeting.
• CHF was a weaker performer through Thursday trade, and it has lagged softer USD trends elsewhere. EUR/CHF tested above it 200-day MA for the first since June, but has seen little follow through. The pair was last near 0.9565.
• Looking ahead, Eurozone CPI then takes centre stage before US ISM Manufacturing PMI rounds off the week’s tier-one data.