There was no obvious fresh catalyst for the rise in USD/JPY during the timezone here. From lows circa 130.80 its traded to highs just over 131.65 and is not far from the highs as I post. We had remarks from Bank of Japan Governor Kuroda and new Deputy Governor Uchida, but these came after the rise.

The focus of the data agenda were CPI data from Australia. This was the monthly CPI, for February, which came in below the estimate and below the January and December month CPIs. It was suggestive of a peak for inflation. The next quarterly CPI, which is a more reliable and complete inflation data point, is due on April 29. We wait until then for confirmation. For the Reserve Bank of Australia, which meets on April 4, the lower CPI for the month will be viewed as adding to the case for a pause in the Bank’s rate hike cycle at this meeting. The Bank said, clearly, in the minutes of its March meeting it was considering a pause. I think they have enough to do just that at next week’s meeting. The opposing viewpoint is that the Bank would be more comfortable waiting for the more reliable quarterly data on April 29 and thus a hike next week and a pause in May.

AUD/USD is down on the session by a few points after the data. NZD/USD is higher with some cross buying noted.

Hong Kong stocks rose strongly on the news that Jack Ma’s Alibaba will be broken up into 6 separate firms, more in the bullets above.

Oil held higher after a huge draw was reported in the private weekly survey of inventory.

Asian equity markets:

  • Japan’s Nikkei 225 +0.39%

  • China’s Shanghai Composite -0.2%

  • Hong Kong’s Hang Seng +2.04%

  • South Korea’s KOSPI -0.12%

  • Australia’s S&P/ASX 200 +0.15%USD/JPY:

usdyen wrap 29 March 2023