The forex trading headlines for Asia trading today, Thursday May 30

  • RBNZ Governor Graeme Wheeler talked 40 points off the NZD in late New York time, saying the NZD was ‘significantly overvalued’ and that he’s prepared to scale up intervention if it looks like it will work (More here from Wheeler)
  • Japan flow of funds data for week ended May 24 was released, yet again showing net Japanese selling of overseas bonds
  • Japan Buying Foreign Bonds Y -1117.3B (prior week was Y – 800.6B, revised from Y -804.4B )
  • Japan Buying Foreign Stocks Y -104.9B (prior week was Y -136.9B)
  • Foreign Buying Japan Bonds Y -457.2B (prior week was Y 17.6B, revised from Y 17.7B)
  • Foreign Buying Japan Stocks Y 27.4B (prior week was Y 715.8B, revised from Y 716.0B)
  • New Zealand April Building permits reached a 5-year high, coming in at +18.5% m/m (vs. +7.7% expected)
  • The y/y result for New Zealand April Building permits was +43%
  • Australian headline Q1 Capex was down, in at -4.7% (vs. +0.5% expected and -1.2% prior)
  • But, the number of more importance, the 2013/14 2nd estimate came in surprisingly above expectations at $156.5bn (vs. $152.49 bn first estimate)
  • Australian April Building Approvals, too, came in strong, +9.1% m/m (vs. expected of +4.0%)
  • Australia: Q1 CBA/HIA House Affordability index 69.7 (vs. 68.9 prior)
  • Plenty of comments from Japan today
  • The Governor of the Bank of Japan, Kuroda, said that data suggests inflation expectations are rising, More form Kuroda here and here.
  • Japan’s chief cabinet secretary Suga got in on the jawboning: Japan’s economy recovering steadily
  • As did Japan’s finance minister Aso: Rise in yields may be negative for lenders
  • Meanwhile, bond yields fell a little today, while stocks opened weak and then traded in a volatile sideways pattern.
  • Brazil hiked its benchmark lending rate by 50 basis points in its continuing fight against inflation

NZD/USD an early mover on the back of RBNZ Governor Graeme Wheeler’s comments (see bullets, above). It got hit from 0.8135 to around 0.8190 and then spent the day trading in a sideways range, retracing to 0.8120 before getting hit back below the figure.

USD/JPY was next to get active, falling away as Singapore futures showed the Nikkei was going to open showing big losses. USD/JPY fell away to just below 100.70, but as the Nikkei recovered some of its losses, so USD/JPY levelled off and then rallied quite solidly, up above 101.50 briefly. It has a volatile session, back toward 101 and then 101.30 again. JGB yields fell a little today.

Euro, cable, swissy … all had relatively uneventful sessions, but the euro did find a little strength, up 20 points on the day.

And so to AUD/USD, which had a bit of sideways range ahead of building approval and CAPEX data in the late Sydney morning. The AUD was very sensitive to the data releases. First to cross the wires was the headline CAPEX data, showing a drop off in Q1 business investment (see bullets, above). AUD/USD immediately got market down, below 0.9600 (from 0.9610/15). The CAPEX data, though, was a mixed bag, and when 2013/14 spending intentions hit the headlines at a better-than-expected results and the building approvals came in with a solid gain (see bullets, above), AUD/USD was off to the races, surging 70+ points. It settled sideways then for the balance of the session.