The forex trading headlines for Asia trading today

  • Taro Aso (Japan’s finance minister) was reported as saying no-one opposed Japan’s policies at G20 meeting, and that Lagarde (head of the IMF) ‘applauded Japan’s monetary policy’ ; the ‘no-one opposed Japan’s policies’ comment saw USD/JPY move above 98.50 from 98.25.
  • Three hours earlier the US Treasury issued a statement after Lew – Aso talks reaffirming US, Japan commitments and that they both confirmed Japan’s monetary policy was for domestic purposes
  • The BOJ was bidding today for 300bn yen in debt longer than 10 years and 500bn yen in 5-10 year debt (they are going to be doing a lot more of this)
  • MNI China Business Flash Indicator for April 59.3 (prior was 58.2)
  • March Conference Board Leading Economic Index for China 258.3 (The prior result, for February, was revised to 258.4 from 257.5)
  • Bloomberg carried an article saying that UBS analysts said China may widen yuan trading band within 72 hours
  • Reuters broke the news that George Soros was, in fact, alive, after mistakenly publishing a draft copy of his obituary
  • Magnitude 7 earthquake hit northern Japan, no tsunami warning issued

A quiet start to the day developed a little momentum as it progressed. EUR quietly edged higher, but put on 25 points in quick time as USD/JPY jumped (more on this coming).

GBP/USD had a better bid tone but was a relative under performer on the day.

AUD/USD and NZD/USD benefited from a few factors, none of which were overwhelmingly positive but combined saw AUD up 50 points on the session (before retracing somewhat.) and kiwi up nearly 50 points too (and before retracing a little, too). The main driver of the higher antipodean pair was a short market, which was helped along by some slightly positive data out of China (admittedly the data was of 2nd-tier importance, but every little bit helped to squeeze some shorts). We also saw news that UBS analysts thought China may widen yuan trading bands as soon as in 72 hours (see bullets, above). Finally, some buying against the yen when USD/JPY popped above 98.50 contributed as well.

USD/JPY had a narrow range morning session, it traded with a bit of strength into the fix, as importers were notable buyers. After the fix it drifted back a little but found support on news of the BOJ buying 5-10 year and 10 year+ debt. It finally popped above 98.50 on comments crossing the wires reporting Japanese finance minister Aso saying no-one opposed Japan’s policies at G20 meeting, and that Lagarde ‘applauded Japan’s monetary policy’. As I write its around 98.45/49, the excursion above 50 so far being brief.