ForexLive Asia-Pacific FX news wrap: USD/JPY jumps 100 pts

G. Samdani Avatar



was a Japanese holiday today, markets were closed. As I post there
has been no sign of Bank of Japan intervention nor any comments to
support the yen from officials.

the weekend US Treasury Secretary Yellen spoke, not sounding too
supportive of Japan’s intervention to send the yen higher. Yellen
was not unsupportive, she was just lukewarm. This should be no
surprise as we were given clear clues last week on this.

opening lows around 152.85 or so in very early Asian trade USD/JPY
has moved higher through the session to be circa 153.95 as I post.

other weekend news, Saudi Aramco raised the June official selling
price of Arab Light crude for customers in Asia. This has offered
some support to oil prices in futures trade to open the new week.

the weekend news is not done. On Saturday Warren Buffett’s
Berkshire Hathaway released its first-quarter earnings report. In
this was the bombshell that the firm had cut its Apple stake in Q1 by
13%. This weighed on Nasdaq futures (NQ) trade somewhat.

for Asia news and data flow, news was of little impact and data flow
was notable only really for another solid expansion for China’s
Caixin Services and Composite PMIs. The services PMI has registered
expansion now for 16 consecutive months. Other PMIs from China for
April have all been shown to be in expansion also, further evidence of the developing
economic recovery in the country.

Chinese markets reopened after
being closed on Wednesday, Thursday and Friday. We had the first
People’s Bank of China USD/CNY reference setting since Tuesday last
week, the PBOC lifted the CNY to its highest in 3 weeks (ie lowest
for USD/CNY). The reference rate that was set was more than 1130 pips from
the Reuters estimate. The PBOC has been setting the rate a huge
distance away from the estimate, an effort to hold the yuan from
devaluation (ps. I prefer the term devaluation for the yuan rather
than depreciation, which I keep for floating currencies. Given the
huge manipulation efforts the PBOC direct at propping up the yuan
every single day its clearly a managed currency, not floating.
Whataboutism comments welcome, whatever floats yer boat – pun
intended 😉 ).

on the central bank front, European Central Bank Chief Economist
gave an interview to Spanish media, dropping pretty clear hints about
a June rate hike coming up, but not guaranteeing it.

Treasurer Chalmers dropped pretty clear hints also, about a budget
surplus coming up this month from his government. Chalmers is under
pressure to trim fiscal stimulus given sticky high inflation, and
take some pressure off the RBA. We had a private survey of inflation
in Australia published today, showing inflation dribbling a little
lower; the y/y headline at 3.7% is a two-year low, while the core
trimmed mean measure at 3.2% y/y, is its lowest since June of 2022.

and other major FX apart from the JPY maintained small ranges only.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *