FX Today: Yen slips on Japan’s jawboning; UK services PMI, Eurozone CPI and US NFP – key

Forex today in Asia cheered the return of full markets, as the Japanese markets opened for 2019, bringing in some currency jawboning. The top Japanese government official along with the BoJ Governor Kuroda came out on the wires and delivered assurances, in the wake of the recent JPY upsurge. As a result, the USD/JPY pair jumped almost 100-pips and tested the 108.50 level before retracing to near 108.30 region. The USD/JPY rally lifted the greenback across its major peers while the reports that the US House of Representatives passed the bill that lifts the partial government shutdown also underpinned the dollar demand.

Further, the rally in the Chinese equities amid upbeat Chinese services PMI, US-China trade talks and hopes of Beijing unveiling further stimulus offered the much-needed lift to the broader market sentiment. The higher-yielding assets such as the Antipodeans, oil prices and Treasury yields found some support from the risk-on market profile. Meanwhile, both the Euro and the GBP traded modestly flat, awaiting fresh impetus from the upcoming macro releases.

Main Topics in Asia

Majority of UK Conservatives oppose May's Brexit deal - Reuters

China's Caixin services PMI a tad firmer at 53.9 in December, a slight beat

China's Commerce Ministry: China and US to hold vice-ministerial level trade talks on Jan 7-8

BoJ’s Kuroda: Markets somewhat rough, affected by unexpected overseas developments

Oil markets seeing signs of life, WTI pushing to hold $47.00

Gold continues to rise, grinding into $1,300.00

Japan’s Aso: Corporate conditions are extremely good

Japan’s Asakawa: Will take appropriate steps on FX if needed

China Premier Li: China will take further measures including targeted RRR cut

Asian stocks split the middle as China rises on trade talk hopes, Japan slips

Key Focus Ahead

Markets brace for an eventful EU calendar ahead, with the main focus on the UK services PMI and Eurozone flash CPI estimate due later on at 0930 GMT and 1000 GMT respectively. At the same time, the second-liner Eurozone PPI data will be published.

The NA session also offers plenty of event risks, with the highlight being the US payrolls and earnings data due at 1330 GMT alongside the release of the Canadian jobs report. Later on, the US Markit services PMI will be published at 1445 GMT, followed by the EIA crude stocks data at 1600 GMT and Bakers and Hughes oil rigs count data at 1800 GMT.

Besides, the speeches by the FOMC member Bostic and Fed Chair Powell will also hog the limelight.

EUR/USD stuck at 1.1400 ahead of EU CPI, US NFP double-header Friday

EUR/USD continues to test into the 1.1400 major technical level, continuing a bounce from the low end of a sideways channel, and the major pairing heads into a Friday session that sees the market focus shifting towards another key reading of the US' Non-Farm Payrolls.

GBP/USD flattened out just beneath 1.2650 as Brexit vote looms, US NFP in the barrel

The Sterling's economic calendar showing for Friday is limited and strictly mid-tier, with the UK December's Markit Services PMI forecast to tick upwards into 50.7 (last 50.4), with both reports coming in at 09:30 GMT.

US NFP report to remind markets that growth outlook remains stable - Nomura

Analysts at Nomura offer a sneak peek at what to expect from the December US labor market report due later on Friday at 1330 GMT.

Canada: Jobs growth likely to slow to 15k in December - TDS

Analysts at TD Securities are looking for the Canadian jobs growth to slow to 15k in December following the blockbuster 94k increase last month.