BOE: STR usage sees another small fall

• JPY continues to be the key focus following the various intervention phases over the past few sessions, with the recovery from yesterday's 155.23 low extending to close to 300 pips. Statements from both the US Treasury and Japan's MoF on coordinated intervention will continue to support implied vols in the pair going forward, with speculative JPY shorts facing far less clear cut risk/reward. The May 06 low of 155.04 will remain a key short-term point of focus. To the upside, 158.58 represents the 38.2% retracement of the Jul 23 - Aug 3 bear leg.
• Fears that the BOJ is behind the curve have receded slightly, helped by initial BOJ accounts data pointing to record levels of intervention late last week, investors still require clearer signs of its intent to combat inflationary pressures via a faster normalization pace. More US pressure on this front as part of the joint intervention arrangement would also be an important step to help reverse yen weakness.
• More generally, commentary from US President Trump that renewed negotiations were Iran’s “last chance” and that he envisages a full and free opening of the controversial waterway could increase the odds that the US-Iran war tilts one way or another in the nearer future.
• A sustained tilt of the conflict could prove a key mover for the dollar index, which has pierced below 99.50 for the first time yesterday since mid-June.
• AUDUSD is able to somewhat recover from yesterday's weakness, with the pair seemingly content to remain in close proximity to the 0.70 handle, where we have spent the bulk of trading since mid-July. For the Australian dollar, from a technical perspective, the crosses are perhaps telling a more important story here, emphasised by AUDJPY bouncing 1.5% since yesterday's 109.24 lows which had been its lowest level since March 31.
• US trade data, factory / durable goods orders and JOLTS are scheduled in terms of data, while central bank speak is expected to remain quiet.

*IRAQ SAYS TANKERS LOADED WITH IRAQI OIL PASSED VIA HORMUZ: INA" bbg