ForexLive European FX news wrap: Yen holds opening gap higher, dollar eases

<p>Headlines:</p><ul><li><a href="https://www.forexlive.com/news/japanese-yen-surge-on-ueda-remarks-the-big-story-to-start-the-new-week-20230911/">Japanese yen surge on Ueda remarks the big story to start the new week</a></li><li><a href="https://www.forexlive.com/news/japans-matsuno-monetary-policy-specifics-are-up-to-boj-to-decide-20230911/">Japan's Matsuno: Monetary policy specifics are up to BOJ to decide</a></li><li><a href="https://www.forexlive.com/news/european-commission-cuts-eurozone-growth-forecast-amid-building-recession-risks-20230911/">European Commission cuts Eurozone growth forecast amid building recession risks</a></li><li><a href="https://www.forexlive.com/news/pboc-to-tighten-scrutiny-on-bulk-dollar-purchases-of-50-million-and-above-report-20230911/">PBOC to tighten scrutiny on bulk dollar purchases of $50 million and above – report</a></li><li><a href="https://www.forexlive.com/centralbank/yuan-exchange-rate-has-solid-basis-to-stay-reasonably-stable-pboc-20230911/">Yuan exchange rate has solid basis to stay reasonably stable – PBOC</a></li><li><a href="https://www.forexlive.com/news/china-august-m2-money-supply-106-vs-107-yy-expected-20230911/">China August M2 money supply +10.6% vs +10.7% y/y expected</a></li><li><a href="https://www.forexlive.com/news/snb-total-sight-deposits-we-8-september-chf4689-bn-vs-chf-4676-bn-prior-20230911/">SNB total sight deposits w.e. 8 September CHF468.9 bn vs CHF 467.6 bn prior</a></li><li><a href="https://www.forexlive.com/news/kremlin-confirms-north-koreas-kim-jong-un-to-visit-russia-in-the-coming-days-20230911/">Kremlin confirms North Korea's Kim Jong Un to visit Russia in the coming days</a></li></ul><p>Markets:</p><ul><li>AUD leads, USD lags on the day</li><li>European equities higher; S&amp;P 500 futures up 0.4%</li><li>US 10-year yields up 4.6 bps to 4.302%</li><li>Gold up 0.3% to $1,924.28</li><li>WTI crude down 0.6% to $86.96</li><li>Bitcoin down 1.1% to $25,609</li></ul><p>The major story so far today remains the surge in the Japanese yen, following weekend comments by BOJ governor Ueda touting a "quiet exit" from the current ultra easy monetary policy settings.</p><p>As European trading began, USD/JPY extended losses by over 1% in a drop to 145.90 before recovering back to around 146.70 levels now – still down by 0.7% or 100 pips on the day.</p><p>The unwinding in USD/JPY longs also led to a notable decline in the dollar across the board. The antipodeans benefited the most amid a jump in the Chinese yuan as well, helped by some support from Beijing.</p><p>AUD/USD is up 0.9% to 0.6430 and keeping at the highs while NZD/USD is up 0.6% to 0.5915, also maintaining gains for the most part.</p><p>The euro and pound are only marginally higher against the dollar with EUR/USD up 0.2% to 1.0720 and GBP/USD up 0.4% to 1.2510 with the latter hoping to stop a run of four straight consecutive daily losses.</p><p>As the yen legged higher, it comes as 10-year JGB yields also hit the 0.70% threshold and that is underpinning bond yields in general. 10-year Treasury yields are up 4.6 bps to 4.302%, so that is also one to watch as it threatens the August highs. The dollar might be pressed lower now but higher yields could yet be a saving grace for the greenback.</p><p>In the equities space, stocks are capitalising on the softer dollar with European indices and US futures holding a slight advance. But we'll see if there is appetite to keep that going through the week, with the US CPI report coming up on Wednesday.</p>

This article was written by Justin Low at www.forexlive.com.