The Japanese Yen led the way higher for a second day in Asia Pacific trade. The currency has been pushing higher since an unusually timid round of bond-buying from the Bank of Japan sparked speculation about stimulus withdrawal by stealth. A sour mood on local stock exchanges probably helped as well, amplifying the appeal of the perennially anti-risk currency.

Prospects for follow-through seem limited however. The BOJ’s “Yield Curve Control” (YCC) framework implies that the size of purchases will fluctuate depending on what it takes to bring bond rates to target. Sometimes that may translate into smaller uptake, but that doesn’t mean the broader policy stance is changing. Meanwhile, flat trade in FTSE 100 and S&P 500 futures argues against entrenched risk aversion ahead.

The day’s offering of European and US economic data is relatively timid, with no obviously potent catalysts on offer. On one hand, that might translate into a day of consolidation for the major currencies. On the other, it might make for elevated sensitivity to headline risk, hinting that a stray bit of news may spook otherwise sleepy markets and produce an outsized burst of knee-jerk volatility.

Asia Session

European Session