Forex news for Asia trading Friday 29 2016

  • BOJ announcement: EASE FURTHER - ETF buying
  • The longer we wait for the BOJ, the more likely easing is
  • NHK reports Japan stimulus pack to be about 28.1tln yen
  • While we await the BOJ - USD/JPY liquidity awful, spreads wide
  • IMF admits disastrous love affair with euro, apologises for immolation of Greece
  • Japan chief cabinet secretary Suga: Stimulus pack to be approved on August 2
  • Japan economy minister Ishihara: Hopes BOJ makes utmost effort
  • Australia - Private Sector Credit (June): 0.2% m/m (expected 0.5%)
  • NZ news - Employment report for Q2 delayed to August 17
  • PBOC sets USD/CNY mid-point today at 6.6511 (vs. yesterday at 6.6597)
  • Trading in JGB futures halted, JPX says its looking into why
  • NZ - July ANZ Activity outlook: 31.4 (prior 35.1) & business confidence 16.0 (20.2)
  • Yen surge, the reasons so far
  • Japan - Industrial Production (June preliminary): +1.9% m/m (expected 0.5%) + retail sales
  • Immature jokes - no one is immune!
  • Japan - Overall Household Spending (June): -2.2% y/y (expected -0.4%) + more data
  • Japan inflation data: Headline (June) CPI: -0.4% y/y (expected -0.4%)
  • UK data - Lloyds business barometer (July): 29 (prior 6)
  • UK data - Gfk Consumer confidence for July: -12 (expected -8)
  • Yen surge - quiz time!
  • New Zealand - Building permits for June: +16.3% m/m (prior -0.9%)
  • USD/JPY smashed
  • Oil - how soon will the "next hot spot for shale" come on line?
  • (Bloomberg) PIMCO on the BOJ: 30% chance the do nothing, 50% they disappoint
  • Australian press: Iron ore prices rise near April highs
  • Q: What time is the BOJ announcement today? A: Well, it depends

There was no settling in for a quiet session ahead of the Bank of Japan announcement. Almost from the off we had action.

USD/JPY (and yen crosses) got smashed lower, from around 105.25 to mid 103s in very quick time indeed. Explanations ranged from algos misreading headlines to a fund with a big sell order that was fat-fingered on the 103 big figure instead of 105.

USD/JPY plunged then bounced, taking a bit longer to climb back, and then not managing to get above 105 before drifting sideways and then lower again.

We got a huge data dump of Japan, CPI, IP, retail sales, and more (see bullets above) which read as a whole seemed to indicate the BOJ could certainly ease further (most Japanese data reads this way though, yeah?).

Staying with the USD/JPY, it fell back below 104, and before too long hit to within a whisker of 105 in a rally that took mere minutes.

Yes, liquidity was very poor, wide spreads, freezing platforms (even JGB trading in Osaka was stopped due to a glitch at one stage).

In the lead up to the announcement, from 105 it got smashed again, toward 103.50 in seconds and then again a sharp bounce to above 104.30.

All this ahead of the announcement ....

Elsewhere ... EUR and CHF slightly stronger (this is against the USD, they were nuts against the yen, of course). Cable ground out higher through the session.

AUD and NZD, like cable, traded net higher also. Little news flow for this pair (although we did get some Aussie data (see bullets above))

Gold edged higher, oil ran along the floor.

OK, back to the yen and Bank of Japan.

The BOJ announcement came quite late, and indeed the bank did expand easing further. BUT, only with a small extra move, to buy more ETFs. Monetary base target unchanged, negative rates unchanged, JGB buying unchanged.

USD/JPY swung widly again, the disappointing move seeing USD/JPy to fresh session lows under 103 but as I update there is little follow though, in fact its back above 103.50. Japanese stocks started to recover (buying ETFS good for something then!).

Regional equities:

  • Nikkei -0.31%
  • Shanghai -0.07%
  • HK -0.82%
  • ASX -0.12%