USD, JPY flows: JPY soft as risk recovers, but...

Riskier currencies have bounced with the early risk negative tone due to the skirmishes in the Straits of Hormuz fading. AUD/USD is back to early European levels at 0.7160 and the USD is generally softer against all currencies other than the JPY. EUR/JPY has pushed 20 pips higher to 183.90. USD/JPY remains towards the bottom end of the range seen since the intervention on Thursday, and has potential to recover further in the absence of further intervention, especially if the USD benefits from nerves around the oil price. But the JPY remains extremely weak across all currencies, and the case for weakness against European currencies remains hard to justify if the tone turns more risk negative.