The two items of note during the timezone here today were the Japanese inflation figures for August and the People’s Bank of China’s setting of the 1- and 5-year Loan Prime Rates (LPR).

Japanese inflation came in on the upside, mainly higher than expected but at subdued levels when compared to other developed markets around the globe. The Bank of Japan policy meeting is this week, the statement is due on Thursday 22 September. While core CPI has risen for 5 months in a row in Japan (rising energy prices and the weaker yen are playing an important role in this movement, and for August there were higher mobile charges as discounting diminished) ‘core-core’ CPI in the country (that excluding food and energy and the closest to the US measure of core CPI) remains below 2%. The BOJ is expected to remain on hold this week. USD/JPY is barely net changed on the session, although it did dip under 143.00 earlier.

To China, and the LPR settings. These remain unchanged, as was widely forecast.

Across major FX there was a slump for the USD in early trade with EUR, AUD, GBP, NZD, yen, CHF and CAD all rising. These moves have been mainly reversed though. NZD/USD has fallen back under 0.5950 but is, as I update, above its overnight low.

usdyen 20 September 2022 wrap