The forex trading headlines for Asia trading today
- China April HSBC Flash Manufacturing PMI missed expectations, big time, coming in at 50.5 (vs. 51.5 expected)
- Much market talk of expectations of Japanese buying of foreign bonds is getting overdone
- S&P said there is a 1/3 chance they will lower Japan’s AA- sovereign credit ratings, citing “risks associated with recent government initiatives and uncertainty of their success”
- Japanese PM Abe said in parliament that he will try to raise minimum wage, in consultation with labour and business; he also said he will decide on the sales tax hike based on economic conditions
- The BOJ’s Kuroda was also in front of the parliament today, he said that BOJ policy is creating a positive cycle for corporate profits, employment, & wages, as well as changing inflation expectations
- Australia: Conference Board leading index for February rises 0.3% (vs. prior of +0.1%)
- Moody’s said the monetary-easing measures announced by the BOJ targeting lower long-term interest rates will have several credit negative effects on Japanese life insurers
The day opened looking like it was going to a quiet one for yen crosses, with option-related interest capping USD/JPY ahead of 100 and buy orders coming in on the downside. The HSBC China Flash Manufacturing PMI, though, upset the complacency. USD/JPY fell from around 99.30 to test 99.00, eventually cracking through the buy orders and running to 98.85, where it stabilized somewhat. Continued liquidation, though, saw it down below 98.70 as of writing the wrap-up.
AUD and NZD, too, were both hit hard on the Flash PMI release, as traders scurried out of ‘risk’. AUD/USD traded down to test 1.0220 (where it has, so far, held), and NZD/USD getting below 0.8385.
EUR/USD had a soft performance, but movement was limited, trading from around 1.3060 to below 1.3040 as I write. GBP/USD, too, was sold off, trading below 1.5260.
