The U.S. dollar has been trading with a mixed tone ahead of Friday's second-quarter gross domestic product data from the U.S. The yen is bid, capturing a hesitant market sentiment pre-GDP. Japanese economic news was disappointing, boosting risk adversity and helping the yen. However, the euro and sterling have lost momentum throughout the European session, softening below $1.30 and $1.56, respectively.

The kiwi was the weakest link overnight with Thursday's dovish RBNZ statement remaining in the limelight. AUD and NOK are softer as question marks over the recovery story remain pre-U.S. GDP data and post Japan data, with WTI crude oil prices down 0.6% in the mid-European session.

Emerging market currencies were hesitant with the HUF (-1.4%) underperforming. China stressed in a statement that yuan reforms have not had any concrete impact on exports, confirming that a "managed" yuan float will be good for China over Thelon term.

The Asia equity market was down for the first time in six sessions, with disappointing Japanese economic releases weighing on sentiment. The MSCI Asia Pacific index was down 0.6%, with weakness across the board. The Nikkei ended the session 1.6% lower, but negative closes were also seen on the Hang Seng, the Shanghai, the Kospi and the S&P/ASX 200 index in Australia. European bourses were trading lower ahead of the U.S. open.

Japanese government bonds climbed back towards a seven-year high, with a bid tone resurfacing following disappointment from the latest Japanese data. Ten-year JGB yields were trading at a low 1.054% by the mid-European session. The European bond market was up.
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