- China: obstacles to revive growth through private consumption remain daunting in near term
- US President Biden to speak Thursday following the US inflation report
- ICYMI - Goldman Sachs no longer expects a eurozone recession in 2023
- China's State Planner says can keep prices stable this year
- The US inflation report on Thursday will provide a clue to a +25 or +50bp Feb Fed hike
- China December inflation data: CPI 1.8% y/y & PPI -0.7% y/y
- Eurozone risks are still tilted to the downside - Credit Agricole
- PBOC sets USD/ CNY reference rate for today at 6.7680 (vs. estimate at 6.7698)
- Australian trade data for November, imports down, exports little changed (m/m)
- "UK construction sector stagnates as interest rates bite"
- USD/JPY extends under 132.00 on the BOJ 'review' news
- Report - The BOJ will review the side effects of easy policy next week
- U.S. Treasury official says Russian oil revenues are falling because of the price cap
- Federal Reserve insider says Fed research shows jobs growth not as strong as thought
- New Zealand data - November building permits +7% m/m (prior -10.7%)
- ICYMI - Goldman Sachs say Brent oil potential to reach $110 by Q3 2023 on China reopening
- ICYMI - Boston Fed's Collins says she favours a +25bp rate hike in February (not +50)
- Trade ideas thread - Thursday, 12 January 2023
- Forexlive Americas FX news wrap: Dollar steady but risk trades rip ahead of CPI
- Nasdaq closes higher for the 4th consecutive day
The Bank of Japan policy meeting is next week, on January 17 and 18. Yomiuri (Japan media) reported today that in this meeting the Bank will review the side effects of its monetary easing and may take additional steps to correct distortions in the yield curve. You’ll recall that at the meeting in December the Bank ‘tweaked’ its yield curve control program to allow 10-year Japanese Government Bonds to trade to a 0.5% yield from the cap at the time of 0.25%. Any further ‘tweak’ along these lines would be another dilution of ultra-easy policy. Let me be clear, the move in December was small, that's why it is described as a tweak, given the vast scale of BOJ easing. Let me also be clear that even this small move from the BOJ had an outsize impact due to Bank of Japan Governor Kuroda continually denying any such change was even under consideration … right up until the bombshell dropped.
This news today prompted a dumping of USD/JPY, from highs on the session above 132.40 to lows under 131.60.
Elsewhere across major FX rates ranges were confined in small ranges with a touch of USD weakness. Traders are awaiting the US CPI report due later Thursday. There are previews linked in the posts above.
Asian equity markets mixed:
Japan’s Nikkei 225 flat
China’s Shanghai Composite -0.2%
Hong Kong’s Hang Seng -0.5%
South Korea’s KOSPI +0.3%
Australia’s S&P/ASX 200 +1.2%
USD/JPY: