USD/JPY, EUR/USD, AUD/USD flows: Dollar touch firmer in ranges, firmer on regionals

Something of a standoff continues to play out with narrowing range action the general story, with lack of volatility that belies the broader level of uncertainty. Trump’s further verbal dismissals of the Iran deal as garbage, and the ceasefire on life support, keeps oil supported and the dollar weighed a touch but very much within bounds still. Light crude front month still capped around $100 at present, and just a bit of drift up down the curve. The clock is still ticking.

It’s notable that there is a bit more upward dollar action across some Asia regionals though so that could start to leak across to the more lethargic majors if it continues. In that respect, there is still that pervading feeling that a further dollar bounce is the ‘inconvenient trade’ for the market at present, so could happen given the right trigger. AUD is weighed a little more on the day but would need to be looking below 0.72 to be signalling an actual pullback from recent o/b action. 

On the Japan front, the market’s glass still seems to be half empty, seeing Bessent’s ‘” constant and robust" coordination in combating undesirable, excessively volatile currency moves’ as failing to escalate support or voice further pressure for BoJ hikes. That still feels like a somewhat pessimistic spin on what is essentially US sanctioning of Japan action to cap yen weakness. Coordinated intervention arguably neither seems likely nor necessary in the current context, while central bank commentary is hardly helpful