The forex trading headlines for Asia trading today

There were no economic data point releases of note today

  • Japan’s finance minister Aso: Yen weakness is a byproduct of deflation-fighting policies & The G20 understand Japan’s policies
  • BOJ’s Kuroda: Said he told the G20 monetary policy was not aimed at weakening yen. Neither Aso’s not Kuroda’s comments are new news – they have been all over the financial wires since Friday.

USD/JPY opened in New Zealand with a gap higher following the announcement from the G20 after Friday’s close that Japan had escaped censure over its deflation-fighting policies and their impact in weakening the yen. Of course, news they had escaped censure was already well in the market from mid-Tokyo morning on Friday, so the news came as no surprise – the small gap up just another piece of evidence for how weak yen is. Nevertheless, the selling we saw ahead of 100 from the week of 8 – 12 April was back again, USD/JPY stalling above 99.90 and spending the rest of the session straddling 99.80/85.

EUR/USD, too, had a small gap higher in New Zealand, thereafter trading to above 1.3090 briefly before retracing the gap and filling it in. The jump in EUR came on the back of a number of confluent factors; there was EUR/JPY buying, of course, but also news of Italian president Napolitano being re-elected, which gave a sliver of hope that warring Italian political parties may be able to work out their differences and form a government without Italy having to go back to the polls. It won’t be long before reality bites and that sliver of hope is smashed to pieces, but for a Monday morning it was enough to spook some shorts into covering. Also contributing to the EUR bounce was news over the weekend of ECB governing council member Nowotny saying he thought it was too early for the ECB to consider a rate cut. Again, this was enough to spook shorts.

AUD and NZD both found support, AUD/USD traded up 30 points from its lows as bids around 1.0270 held firm. NZD/USD was the star performer, though – after falling to below 0.8385 as New Zealand opened it rallied to above 0.8450. NZD/JPY buyers were notable (with stops above 84.10/20 triggered).

Gold traded higher during the session, as did GBP/USD.