FX Action: The yen is being bid amid risk aversion
FX Action: The yen is being bid amid risk aversion in global stock markets, which has driven Europe's Stoxx 600 index down by 0.7% and S&P 500 futures to a 0.3% loss. Profit-taking impetus of tech shares into an expected Fed tightening (though likely to be accompanied with a signal of a less aggressive normalization path) has been weighing on equity markets, which is in turn kindling demand for the yen by virtue of its safe haven statues. USD-JPY has ebbed back below 110.00, about 40 pips down on Friday's closing level. EUR-JPY and other yen crosses are also down, with EUR-JPY falling despite EU-positive elections over the week (success of Macron's party in National Assembly elections in France, and setback of the eurosceptic 5-Star Movement in Italian municipal elections). Japanese data today were a mixed back, including soggy producer prices offset, a -3.1% reading on April machinery orders (versus expectations for a 0.5% gain), and a +24.4% y/y rise in the flash machinery orders reading for the first 20 days of May. The BoJ meets this week, announcing Friday, amid widespread expectations for no change in policy settings, though analysts expect the central bank to follow the ECB's lead in upgrading its economic outlook while lowering inflation forecasts.