ForexLive Asia-Pacific FX news wrap: USD/JPY trades higher

• Fed speakers Friday include Waller & Daly. Saturday is Kugler. Chair Powell speaks Sunday
• ECB’s Luis de Guindos speaking Friday
• Bank of England Monetary Policy Committee member Catherine Mann speaking on Friday
• ECB’s Schnabel says June rate cut may be appropriate, path after is much more uncertain
• Heads up – Federal Reserve Chair Powell is speaking on Sunday afternoon US Eastern time
• There will be press conference in China later today re policies to ensure housing delivery
• China April March Industrial output +6.7%y/y (expected +5.5%) Retail sales +2.3%(3.8% exp)
• China April new house prices -0.6% m/m (prior -0.3%)
• PBOC sets USD/ CNY mid-point today at 7.1045 (vs. estimate at 7.2222)
• The Bank of Japan left its JGB buying amounts the same as the previous operation
• Singapore Non-oil Domestic Exports (NODX) April 2024: +7.6% m/m vs. +7.9% expected
• Bank of Japan Governor Ueda says he has no immediate plan to sell the Bank’s ETF holdings
• Goldman Sachs have shifted their forecasts for PCE inflation up by a tiny margin
• Bank of America continue to expect the first Fed rate cut in December
• New Zealand data: PPI Output +0.9% q/q and inputs +0.7% q/q
• Reserve Bank of New Zealand policy meeting preview – (still) hawkish hold expected
• ICYMI – JP Morgan’s Dimon says inflation is worse than people think
• ICYMI – ECB’s Kazaks says first rate cut likely in June, but spaced out after that
• Bank of Japan may raise rates as soon as June (opinion from ex-BOJ chief economist)
• More from Fed’s Bostic: Fed will get to 2%, won’t ‘move the goalposts’
• A move of EUR/USD to 1.10 looks ‘premature’
• Forexlive Americas FX news wrap: US dollar bounces back. DJIA hits 40,000
• No records today. Major indices close lower after record closes yesterday
• Fed’s Bostic says one data point is not a trend, remains resolute, vigilant on inflation
• Microsoft is asking hundreds workers to consider relocating out of China
• Trade ideas thread – Friday, 17 May, insightful charts, technical analysis, ideas

USD/JPY
rose higher during Asia trade. The Bank of Japan conducted a Japanese
Government Bond buying operation today, leaving the amount of
purchases the same as in its previous operation. In its previous
operation you’ll recall the Bank trimmed back its purchase amount
of 5 – 10 year (remaining until maturity) JGBs, which sent USD/JPY
lower (only to be scooped back up again, this was all a few days
prior to the US CPI sell-off session). USD/JPY rose today to highs
circa 155.90+ and its more or less sitting near those highs as I update.

The
USD did gain more broadly, though. EUR, GBP, AUD, NZD, CHF and CAD
all lower.

In
data today we had PPI from New Zealand (see bullets above) and, of
more focus, both house prices and economic activity (industrial
production, retail sales, investment and unemployment) data from
China for April. While house prices continued their slide the other
data was more mixed:

• Factory
  output beat, unemployment beat
• Retail
  and investment missed

Domestic
consumption in China, as reflected in the miss for retail sales, is
still struggling.

Central
bankers also featured. Federal Reserve Bank of Atlanta President
Raphael Bostic said the Fed’s job was not done yet on inflation,
the economy was strong, and he remains “resolute” and
“vigilant” about inflation. He did soften all this by
saying that the outlook right now is for a continued fall in
inflation, which would make it appropriate to reduce rates later in
the year, but nothing is locked in. FWIW I’m tipping September for a cut. As I’ve said before there is the US election just after this and while the Fed is independent, its not THAT independent!

From
the European Central Bank, Executive Board member Isabel
Schnabel said that depending on incoming data a rate cut in June may
be appropriate, but beyond June the path is much more uncertain. She
added that a rate cut in July does not, at this stage, seem warranted
by the data.

Bank of Japan Governor Ueda said he has no immediate plan to sell BoJ’s ETF holdings.

A
couple of items still to come to be aware of.

• There
  is a press conference coming up later today from China’s housing and
  financial regulators regarding policies to ensure housing delivery. I
  haven’t a time for this. The State Council will hold a real estate
  policy meeting also today,
  and is said to be likely to announce major supportive policy measures
  soon.
• We
  get a couple of Federal Reserve speakers over the weekend, most
  notably Federal Reserve Chair Powell is speaking at 1530 US Eastern
  time on Sunday May 19, at Georgetown Law commencement ceremony.
  That’s 7.30am New Zealand time on Monday. Asia FX will have super-ultra-thin
  liquidity at that time.