The data point focus during the Asian session was on February CPI data from Japan. The headline rate fell hard from January:

Headline rate 3.3% y/y

expected 4.1%, prior 4.3%

But both of the core measures were much more ‘sticky’”

CPI ex-Fresh Food 3.1% y/y (this is the 'core' rate)

expected 3.1%, prior 4.2%

CPI ex Food, Energy 3.5% y/y (this is 'core-core' rate, the closest to the US measure of core CPI)

expected 3.4%, prior 3.2%

The Bank of Japan have continued to forecast inflation to fall from around September/October. New Bank of Japan Governor Ueda begins in his role from the second week in April. So far he has not shown much inclination to speed towards tighter policy.

On the session USD/JPY had a shunt lower, from highs above 130.80 to a six week low under 130.30. As I post it has recovered to be mid-range circa 130.50.

Otherwise across the majors board ranges were more subdued and the USD was a touch stronger. CHF, CAD, AUD, EUR, NZD all down against the big dollar.

In other data news Australia’s flash March PMIs slumped into contraction. Japan’s flash March PMIs showed manufacturing remained in contraction (with a slight improvement from February) while services continued their expansion run and the Composite hit its highest in 9 months.

The PBOC set the CNY 300+ points stronger at the reference rate today, confirming CNY’s upmove on Thursday.

In geopolitical news the US conducted air strikes against Iranian facilities in Syria.

Asian equity markets:

  • Japan’s Nikkei 225 -0.26%

  • China’s Shanghai Composite -0.65%

  • Hong Kong’s Hang Seng -0.49%

  • South Korea’s KOSPI -0.65%

  • Australia’s S&P/ASX 200 -0.26%

usdyen 24 March 2023 wrap