📝Seen EURJPY Selling From Real Money, EURUSD Downside Demand: UBS Strategy

The dollar is better bid on Friday as USDJPY takes the spotlight following a surprise announcement that Kazuo Ueda will be the next governor of the BoJ. Spot initially knee-jerked down below 130 before retreating higher as Ueda outlined the 'need to continue easy policy', whilst observable flows have been skewed towards the topside.

In G10, the desk has also seen GBPUSD buying from hedge funds, as well as EURJPY selling and NZDCHF buying from the real money community. In the vol space, it has been a whippy morning in JPY as the market has seemingly priced the Ueda announcement as a done deal, whilst 1m USDJPY vol was paid up to 15.0 before settling to around 14.75 now. Elsewhere, 1m EURUSD downside demand has been growing in the last couple of sessions, and Friday is no exception.

In emerging markets, a very hot inflation print in Hungary has led to a jumpy time in the spot market, supplemented by topside interest from hedge funds in the vol space. Elsewhere, the desk has seen USD buying against PLN and HKD. - UBS Strategy