The Japanese Yen fell for the tenth consecutive day overnight, down as much as 0.9 percent against its major counterparts. The selloff came after the Federal Reserve released minutes from the March meeting of the rate-setting FOMC, which revealed an increasing number of policymakers have started to lean towards unwinding stimulus measures. With the heretofore aggressively dovish Fed now signaling that tightening is around the corner, the Dollar is increasingly less attractive as a vehicle to borrow funds cheaply for carry trades, encouraging investors to unwind short-USD positions and reallocate their yield-seeking portfolios toward short-Yen bets. The US-Japan 2-year bond yield spread jumped to 61.3 basis points, putting it just shy of the 8-month high set in February. On the data front, Australian Home Loans dropped for the second consecutive month in February, down 5.6 percent. The reading reinforces expectations that the Reserve Bank of Australia will hold off on raising interest rates for the time being after policymakers held them at 4.75 percent following yesterday’s policy meeting. Meanwhile, UK retail inflation slowed as the BRC Shop Price Index added 2.4 percent in the year through March, marking the largest pullback in nine months. The slowdown comes just ahead of tomorrow’s Bank of England rate decision, reinforcing expectations that Mervyn King and company will shy away from a rate hike.

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