US Treasury yields traded higher during the session, helping the US dollar to rise, although moves were not large. USD/JPY tested towards 134.50 and EUR/USD down to just under 1.0665. GBP, CAD, AUD and NZD all lost some ground against the big dollar also.

UST trade reopens in the US Tuesday after the long weekend.

News flow was very light indeed. Data were the flash PMIs kicking off in Australia and Japan.

On the central bank front we had some comments from Bank of Japan Governor Kuroda (see bullets above) and also the February meeting Reserve Bank of Australia minutes. These were preceded last week by extensive public remarks from RBA Governor Lowe (testimony in parliament twice last week) and thus did not have anything to surprise. There was some chatter on the fact that the minutes said the Bank considered a +25 and a +50 bp rate hike, while a pause was “not an option”. Deputy Governor Bullock spoke back in December, saying a pause was an option. But that was before the shockingly high Q4 CPI data hit in January, which jolted the RBA back to reality and the February rate hike.

Asian equity markets:

  • Japan’s Nikkei 225 -0.1%

  • China’s Shanghai Composite +0.1%

  • Hong Kong’s Hang Seng -1.2%

  • South Korea’s KOSPI +0.1%

  • Australia’s S&P/ASX 200 -0.2%

wrap usdjpy 21 February 2023