Forex news for Asia trading Wednesday 23 January 2019
- Japan All industry activity index -0.3% m/m (vs -0.4% expected)
- The Bank of Japan … "is in no hurry to reach its 2% inflation target"
- BOJ announcement - no change to policy but revisions to forecasts
- Fitch affirms Japan at A with the Outlook Stable
- New Zealand CPI responses coming in
- Looks like an Australian has gone missing in China … possible state security charges
- RBNZ core inflation gauge 1.7% y/y (prior 1.7%)
- US press reports govt shut down may now delay tax refunds
- China MOF official says the country will add moderate fiscal spending this year
- PBOC sets USD/ CNY mid-point today at 6.7969 (vs. yesterday at 6.7854)
- PBOC injects 257bn yuan in a targeted MLF operation
- BOJ data shows loan demand increasing in January, companies and households
- Australia - Westpac's Leading Index falls again
- Japan trade balance for December Y -55.3bn (expected Y -42.3bn)
- Brexit - Shadow Chancellor says Labour likely to support sensible delay plan
- More on the US Senate to vote on re-opening government
- Trade ideas thread - Wednesday 23 January 2019
- New Zealand Q4 CPI 1.9% y/y (expected 1.8%)
The session kicked off with CPI data from New Zealand (for Q4 2018). The headline results were a little above expected and saw the NZD marked higher. NZD/USD popped to circa 0.6750 and while other currencies were flattish (AUD only got a few point bounce on the back of the NZD) this saw NZD gain against its crosses. After stabilising above 0.6750 NZ/US dribbled just a few points lower and then moved higher again, approaching 0.6780.
RBNZ data followed, a core CPI measure used by the Bank, which came in unchanged on the quarter and took some of the heat out of the currency. Not a lot, though, NZD/USD drifted to around 0.6765 but its back to a new session high as I post.
Yen was the other mover on the session here ahead of the BOJ policy announcement. We had some data from Japan in the morning, exports slumping but loan data coming in positive. A mixed bag. Yen then started a steady move lower, USD/JPY adding on points from lows around 109.35 to an eventual high above 109.70. Yen crosses traded higher. NZD/JPY got the double whammy and has been a big winner on the session.
The Bank of Japan policy statement was accompanied by an updated outlook report (links to both are in the BOJ bullet above). Both the policy statement and outlook were as expected, unchanged for the first, downgrades for the second. Most notably the outlook for the fiscal year 2019 (begins in April in Japan) is for core CPI at 0.9%, the BOJ really taking an axe to the previous forecast for this of 1.4%.
AUD/USD has ticked a little higher on the session. AUD/NZD is, of course, lower. There was little impactful news nor data from Australia on the session. EUR, CHF, GBP are all not too much changed. CAD has gained against the USD, USD/CAD is down 30+ points from its earlier session high.
Still to come:
