OIL: Saudi May Cut Dec. Arab Light OSP to Asia Towards Yearly Low

• USDJPY has extended this week’s bearish theme overnight, extending the pullback from last week’s highs to around 2%. Today’s price action has resulted in a break of 147.60, the 50-day EMA, with the pair sliding back below 147.00 in recent trade. This places the focus back on pivot support at 145.49, the Sep 17 and post-Fed low.
• US government shutdown concerns have been one of the major drivers this week, and given the expectations that NFP will now be pushed back, there will be heightened significance on today’s ADP employment release and the ISM manufacturing PMI report.
• Additionally, domestic tailwinds may be playing their part in the renewed optimism for the Japanese yen. First of all, Wednesday’s Tankan survey indicated solid business sentiment and earnings in September. The survey is likely to support a rate hike and increase the odds of an October move, although final decisions will depend on incoming data, with BOJ Governor Kazuo Ueda’s upcoming speeches closely watched for any shifts in the Bank’s “no-rush” stance, MNI understands.
• Separately, frontrunner to win the LDP leadership election Koizumi says that "It is important for the government and the BOJ to share the same overall direction", and that "the government's economic policy and the Bank of Japan's monetary policy will work together to realise a virtuous cycle in the economy."

Of note:

EURUSD 3.12bn at 1.1750/1.1775.

EURUSD 2.85bn at 1.1785/1.1800 (thu).

AUDUSD 1.87bn at 0.6600 (thu).

AUDUSD 1.6bn at 0.6600 (fri).

EURUSD 1.02bn 1.1750 and 1.69bn at 1.1820 (tue).

• EURUSD: 1.1700 (1.74bn), 1.1710 (619mln), 1.1735 (350mln), 1.1750 (1.51bn), 1.1760 (797mln), 1.1775 (811mln), 1.1791 (460mln), 1.1800 (1.17bn).
• USDJPY: 146.50 (1.09bn), 146.85 (286mln), 147.50 (687mln).
• USDCAD: 1.3900 (489mln).
• AUDUSD: 0.6600 (869mln).

ERM6/H6 98.31/98.43cs calendar, bought the June for 1.25 in 5k.