CNH: Lags Broader USD Sell-off, CNH/JPY Dips Under 20.00

Yen lagged broader USD shifts through Tuesday. USD/JPY tracks near 149.75/80 in early Wednesday dealings, losing a little bit of ground versus the USD for Tuesday's session. All the other majors have rallied against the USD, led by the EUR (up over 1.25%). Broader stagflationary concerns for the US economy weighed on dollar sentiment. 

• USD/JPY broke below 148.60 support during Tuesday trade, a level that had been building in significance. Spot traded as low as 148.10 but bounced back ahead of the APAC crossover, tracking back towards 150.00 in latest dealings.
• Sentiment has been impacted by late US Tuesday comments from US Commerce Secretary Lutnick, who hinted tariff relief/compromise with Canada and Mexico could be announced Wednesday in the US during a Fox News interview. This has aided CAD and MXN sentiment and broader risk appetite. US yields also spiked late in US trade, the 10yr yield back to 4.25%, after touching 4.10% earlier in Tuesday trade.
• This moves have seen the traditional yen safe underperform through the latter stages of Tuesday US trade and early Wednesday Asia Pac trade. On the upside for USD/JPY, key short-term resistance has been defined at 151.30, the Mar 3 high. Clearance of this level is required to signal a base.
• Locally today we have the final Feb reads for the Jibun bank PMIs (services and composite). We also have a speech from Deputy Governor Uchida.
• In the option expiry space note the following for NY cut later: Y147.90-00($702mln), Y148.50($505mln), Y149.00($720mln), Y151.00-10($1.0bln), Y151.85-00($1.0bln). 

• NZD/USD jumped +0.77% to 0.5660 on Tuesday, tariff considerations have been a primary driver of FX sentiment, with the USD weaker across most G10 currencies, the BBDXY is -0.60%, with the ongoing stagflationary concerns regarding the US economy also weighing on the USD.
• We tested key support on Monday at 0.5600, briefly trading below it below ticking higher a clear break here would then open up a move to retest the Feb 3 lows of 0.5516. To the upside, key resistance sits around 0.5674/.5695 (20-, 50-Day EMA).
• GDT prices declined, with the average price for whole milk powder falling to $4,061 from $4,153. The weighted average price for all milk products dropped to $4,209 per ton. The GDT price index fell 0.5%, reflecting a broad decline across dairy products.
• Expiries 0.6350 (NZD352.8m). Upcoming notable strikes: 0.5795 (NZD1.14b March 7), 0.6150 (NZD330m March 6), 0.5840 (NZD328.6m March 10)
• RBNZ dated-OIS is fully pricing in a 25bps cut in April, while there is about a 82% chance of a further 25bps cut priced for May up from about 70% last week, with a cumulative 80bps of cut priced by November, up from 64bps.
• The NZ-US 2yr swaps continues to rise, trading 3bps higher on Tuesday to -47.5bps, that is a 37.5bps move since the start of Feb
• Today we have ANZ Commodity Price & Corelogic home Values prices

Bloomberg reported that US oil inventories fell 1.455mn barrels last week after 640k the week before, according to people familiar with the API data. Stocks at Cushing rose 1.6mn. Gasoline was down 1.25mm, while distillate rose 1.1mn and distillate.  The official EIA data is released later today.