Yen Weakness Dominates Early, China PMIs On Tap Later

Yen weakness is the main feature in early FX dealings for Friday. The pair has broken through 133.00, last around highs of 133.35. This is -0.50% weaker versus NY closing levels. Note we are also close to the 50-day EMA at 133.38. Other pairs have been mostly quiet, although AUD and NZD are drifting higher a touch, so outperforming the weaker yen trend.

• Yen weakness comes despite Mar Tokyo CPI beating expectations, with the core (ex food and energy measure) hitting fresh multi-decade highs in y/y terms (3.4% versus 3.2% forecast). Weaker jobless and job-to-applicant figures provided some offset, although Feb retail sales and IP were stronger than expected.
• Again, month end, quarter end and fiscal year end flows could a factor for the yen.
• Higher USD/JPY levels has been enough to push USD indices higher, the BBDXY last just above 1228.
• Both AUD and NZD are around 0.15/0.20% higher against the USD. AUD/USD up to 0.6720/25, NZD/USD to 0.6275/80.
• Earlier ANZ NZ consumer confidence slipped. Coming up shortly is AU credit figures, but they are unlikely to move market sentiment.
• Greater focus is likely rest on China official PMI prints for March, which are expected to ease from strong Feb readings and is the main focus point for Asia Pac markets.