FX Update: The yen printed fresh lows
FX Update: The yen printed fresh lows as a cautious risk-on sentiment persisted in markets in Asia after the three major U.S. equity indices posted new record highs. Top U.S. and Chinese trade negotiators held a telephone conference yesterday, while China's Global Times reported that the two sides were "moving closer to agreeing" a phase 1 deal (now more than six weeks after first being announced). Fed Chairman Powell also threw in to the mix of sentiment drivers a remark that "the glass as much more than half full." Merger and acquisition activity was another factor in the latest rally phase on Wall Street, while the ECB's chief economist, Lane, said that if the inflation outlook worsens the central bank could adjust all of its instruments -- quantitative easing, negative interest rates and the forward guidance. USD-JPY made a two-week high at 109.20 before retreating to the upper 108.00s. Most yen crosses also saw new highs. AUD-JPY, for instance, saw a six-day peak. The Swiss franc also saw some weakness, though USD-CHF and EUR-CHF remained within their respective Monday ranges. The Australian and New Zealand dollars saw moderate gains, though both still remained within their respective lows and highs from yesterday. The Canadian dollar, in contrast, saw moderate softness following a quite-sharp intraday dip (nearly 1% at the lows) in oil prices yesterday. Sterling has come under moderate pressure, reversing some of the gains it saw yesterday. With just over two weeks to go until the UK general election, the latest polling suggest a claw back in support for Labour, which has been taken as a sterling selling cut by markets. Politico's poll tracker is showing Labour support at 31%, up 2 points from yesterday, with support for the Tories down a point, to 42%.