[MARKET ANALYSIS] G10s mostly firmer vs the USD; Kiwi and the NOK outperform, DXY -0.2%

• DXY gradually weakened throughout the morning to a 99.70 base, despite higher energy prices (Brent +1.5%), which are typically constructive for the USD. Weakness in the Buck likely comes as participants digest the July series of data, which contained dovish components. CPI/PPI were in-line and soft, respectively, while the payrolls figure will likely give food for Fed doves. Today, USD is set to digest US Retail Sales and the UoM survey.
• USD/JPY -0.2% and continues choppy action, this time after another BoJ source said the Bank was set to raise interest rates as soon as September; this saw the pair slip 17 pips to a 159.15 base, a level which is being tested at the time of writing. Currently, markets assign a c. 80% probability of such action in September. More pertinently, Bloomberg sources on Thursday said the Takaichi government is said to support faster BoJ rate hikes. The piece also said the bank could raise rates in either September or October; the timing of the latest source potentially the reason why this JPY strength has stuck.
• Kiwi is rebounding vs the USD after losses following Thursday's soft inflation expectations survey; action which has entirely faded with the pair ~0.2% higher than pre-data. NZD/USD +0.4%, once again above all significant DMAs.
• NOK is the G10 outperformer, strength which is likely a function of oil prices despite the Norges Bank hold on Thursday raising questions over the removal of the tightening bias from the statement in September. Brent Oct’26 is firmer by 1.5%, after rising throughout the EU morning without a clear catalyst. NOK/SEK sees continues support above 1.00, while USD/NOK broke out of recent ranges

Broad USD softness on a day of firmer crude runs against the usual correlation, which in past episodes has tended to flag positioning or data digestion rather than a fresh dollar driver; the typical sequence is that such moves get tested by the next hard US print, here retail sales and sentiment, with the dollar's reaction to the data more informative than the pre-data drift. The JPY leg fits a well-worn pattern: repeated sourced reports on BoJ timing have historically produced choppy, headline-driven yen strength that fades until either the bank acts or official pushback emerges, and the distinction between a September and an October move matters for front-end JGBs and the pair's ability to hold breaks of round levels. Reports that the government favours faster normalisation are the more durable input, since political cover has in past cycles been the binding constraint on BoJ pace. NOK outperforming on an oil bid with the Norges Bank having just held is the classic terms-of-trade override of rate differentials; the tell for persistence is whether USD/NOK's range break holds once crude stops rising, as energy-led krone rallies have often unwound faster than rate-led ones. NZD fully fading a soft inflation expectations survey is consistent with the pattern that single survey prints get retraced when the global dollar tone dominates; the follow-ons are the US data and any further BoJ sourcing rather than the domestic calendar.