FX Update: The dollar continued to deflate
FX Update: The dollar continued to deflate, led by ongoing and relatively hefty decline in USD-JPY, which has declined for a fifth straight session and is heading into the London AM session with a 0.5% loss on the day so far. The yen's outperformance also continued to weigh on yen crosses, which many are taking as portending further heightened bouts of volatility in global markets, even as most equity markets have taken consolidative tone over the last day. USD-JPY logged a low earlier in Tokyo trading at 106.84, which is the lowest level seen since November 2016. EUR-USD lifted to a five-session peak of 1.2392. There are market narratives pointing to the release of U.S. CPI data later today as likely to evidence still-lacklustre price pressures. Indeed, analysts expect headline U.S. CPI to dip to 1.8% y/y in January from 2.1% y/y December, although given the prevailing sentiment, any unexpected acceleration would likely be a strong dollar buying cue. Japanese growth data today disappointed, with Q4 GDP falling to 0.5% q/q growth in they seasonally adjusted annualized figure, off the median forecast of 0.9% growth.