The US 10-year Treasury yield hit its highest level since 2007 in Monday US time trade. Despite this the US session saw a lower US dollar and higher equity indexes. This set the stage for Asia trade today where regional stocks are mainly higher and the losses for the US dollar have continued, albeit in a small range only.

EUR, GBP and NZD are all a touch better bid against the dollar while AUD and CAD are laggards. USD/JPY has dropped away from its early high just shy of 146.40 to back circa 146.00. There has been no fresh news nor data out of Japan, although the benchmark 10 year JGB saw its yield track higher.

In local geopolitics North Korea informed Japan it intends to launch a satellite sometime before August 31. South Korea issued maritime safety warnings over the North Korea plan. Markets have been shrugging off North Korean belligerence.

From China news flow was light. The People’s Bank of China set the reference rate for the onshore yuan around 11 big figures from modelled estimates, the biggest gap ever. Remember, the aim of the People’s Bank of China is to slow the drop in the yuan, hence the efforts to prop it up in the face of an ever-widening 10-year yield differential with the US.

Asian equity markets:

  • Japan’s Nikkei 225 +0.7%

  • China’s Shanghai Composite +0.3%

  • Hong Kong’s Hang Seng +0.7%

  • South Korea’s KOSPI +0.6%

  • Australia’s S&P/ASX 200 +0.1%

usd index wrap news chart 22 August 2023