JPY Leads FX Majors Following Discussions Between US And Japan On Currency Intervention

Heading into today’s European trading session, the risk tone is leaning risk-off. Asia-Pacific indices are negative, measures of volatility are elevated, and safe-havens are supported.

Leading Asia-Pacific indices to the downside is the Nikkei 225 at -1.63%, followed by the ASX 200 at -1.57%, the Topix at -1.19% and the Hang Seng at -0.17%. The CSI 300 is positive on the session at +0.74%.

In the FX complex, it’s JPY leading to the upside, with the safe-haven currency supported by both the risk-off tone and reports following a meeting between Japanese Finance Minister Suzuki and US Treasury Secretary Yellen. According to reports, discussions on coordinated currency intervention were likely, while Suzuki confirmed they would be communicating closely on FX.

In contrast to JPY and leading to the downside are the antipodeans, with AUD and NZD almost neck and neck to be the session laggard. Consequently, AUDJPY has slipped below the 94.00 handle, EURNZD is currently testing the 1.62 handle to the upside.

Looking ahead, today’s European session will see PMI reports from throughout Europe and the UK, while the following US session will also see further comments from ECB President Lagarde and BoE Governor Bailey.