JPY

With the number of US data releases slowing to a trickle and next week’s all-important inflation print looming ahead, risk assets are inching higher, leaving currency markets largely rangebound. Equity futures are advancing while yields come under pressure – translating into a slightly weaker dollar.  Implied volatility levels are coming back down, suggesting that a post-jobs report bounce in yields has helped reset market positioning to more neutral levels – reducing the perceived risk of a big washout around the January consumer price index release. Implied terminal rate expectations are holding between 5.1% and 5.2%, up from the 4.9% area...

Currency markets are settling into new trading ranges after the Bank of Japan defied pressure to change its policy settings, and ahead of data that could shed light on the strength of underlying consumer demand in the world’s largest economy. The greenback is slightly weaker on the day, and is down more than 10 percent from its late-September highs. The yen dropped almost 2 percent last night after the Bank of Japan said it would leave its yield curve control policy unchanged, surprising a small contingent of market participants who were betting on another increase in the target band. Policymakers...