March 20, 2023 21:44 GMT
Yne Unwinds Some Gains As US Yields Stabilize, Local Markets Closed Today
USD/JPY got close to 130.50 late in the Asia Pac session/early London/EU trading on Monday. This was fresh lows back to early Feb, but from there we recovered ground. We rallied back to 131.85, but now sit slightly lower around 131.25/30, close to end NY levels from Monday. The recovery in USD/JPY coincided with a firmer US cash Tsy yield backdrop.
- The US 10yr yield ended around 3.485%, close to earlier Monday highs, although USD/JPY is comfortably sub highs from the session (132.65). So, some divergence emerged through NY trade, with yen outperforming the firmer yield backdrop.
- Yen unwound gains on crosses as equity sentiment improved through EU and US trade, as the market digested the UBS take over of Credit Suisse and major central banks stepped up efforts to aid USD liquidity through swap lines. US financial stocks rose, although small cap banks were still under pressure.
- AUD/JPY got to fresh lows around 87.15, but now tracks back in the 88.15/20 range.
- Note Japan markets are closed today for a holiday.