It was an active day for data in Asia, characterised by a net gain for the US dollar across the majors board.

From Japan today we had the ‘Summary of Opinions’ from the Bank of Japan January meeting (the full minutes of the meeting will follow on March 25). The Summary was sparse with reports on various opinions of individual members but with no guide as to the collective consensus. The usual noises were made about continuing with easy policy, patiently maintaining monetary easing. And that are signs of achieving target inflation.

USD/JPY dropped after the Summary to lows under 147.25 but has since rebounded to be net higher on the session.

The next item of interest was from Australia, where official Q4 2024 inflation fell lower than expected and much lower than in Q3, and indeed to its lowest in two years. The improvement was such that it appears to take further rate hikes from the Reserve Bank of Australia off the table (unless deterioration is once again seen in the future, of course). Its way too early to think of rate cuts though, with pundits and the Treasurer saying there is still work to be done getting back to target (for the RBA this the 2 – 3 % band).

AUD/USD dropped away after the data and is not too far from its session low as I update circa 0.6572. As said in the headline, though, it was a session of US dollar strength more widely. EUR, GBP, CHF, NZD, CAD and JPY are all lower against the big dollar.

From China we had a little improvement for the official National Bureau of Statistics (NBS) PMIs for January. The manufacturing PMI still remains in contraction, its fourth month in a row and for 9 of the past 10 months. USD/CNH is little changed on the session. Chinese equities, both mainland and Hong Kong, are softer again on the day.

US equity index futures fell below their Tuesday RTH lows after earnings releases late in the US afternoon.

aud wrap chart 31 January 2024 2