The forex trading headlines for Asia trading today, Monday May 20
- The big market-moving event today was Japan’s economy minister Amari saying in a Sunday TV interview that “it’s being said that the correction of the strong yen is largely completed. If the yen keeps on weakening a lot more, it will have a negative impact on peoples’ lives”
In other news:
- Reuters Tankan for Japan manufacturers +7 in May vs. -4 in April, giving the first positive read since May of 2012
- Reuters Tankan non-manufacturing index is +19 in May vs. +12 in April, to show the highest since October 2007
- New Zealand Performance of Services Index for April 56.1 (vs. prior of 55.4)
- UK Rightmove House Prices +2.1% m/m (vs +2.1% prior)
- UK Rightmove House Prices +2.5% y/y (vs. +0.4% prior)
- More comments from Amari later in the session: Core CPI is showing signs of turning positive due to BOJ’s monetary policy, and consumer prices are still in a mild deflationary phase
- A ‘government official’ also reportedly conveyed comments made by BOJ head Kuroda:
- Natural for long-term yields to rise as inflation expectations pick up
- But don’t expect long-term yield rise to be sustained, given the BOJ’s easing policies
- New Zealand finance minister English commented on TV over the weekend that New Zealand’s rising house prices will increase the pressure on the central bank to raise interest rates, particularly if the housing market keeps growing at rapid rates
- China halts imports of New Zealand meat over certification dispute
- Silver had a big fall at the open of trade, down below $US20 before any bounce, dragging gold lower too
Most activity today was in the yen, where USD/JPY moved from an above 103.00 open in early New Zealand to trade very briefly below 102 as economy minister Amari’s comments diffused through the wires (see comments in first bullet point, above). It bounced quickly back up to 102.85/90 though and by the time the Tokyo market opened it had settled into a narrow range around 102.80, with bids coming back into the market 102.50/70 and offers above 103.00.
Elsewhere it was subdued on a very light data day to open the week.
GBP/USD traded a narrow range around 1.5180 after touching just below 1.5160 early. EUR/USD was bid at 1.2805/10 and recorded highs of 1.2845/50 with some EUR/JPY-induced volatility.
AUD and NZD were bid through the session, NZD/USD up to 0.8115/20 and AUD/USD 0.9770/75.
