Asia Summary and Highlights 10 June

Asia Session

The Japan Q1 GDP has been revised slightly higher from preliminary figure q/q remains at  -0.5% but annualized slipped to -1.8% from -2%. The slack in consumption seems to have raised eyebrows within the Japanese government and could be seen from "leaks" of the Japanese annual economic blueprint. However, we do not see such data to significantly derail BoJ's tightening plans as inflation will rebound in the coming months on accelerated wage hikes. If BoJ missed the window, they maybe stuck for a longer while. USD/JPY is trading 0.26% higher at 157.09 with both the U.S. Treasury and JGB yields higher.

As the Chinese, Hong Kong and Australia market are observing respective holidays, risk sentiment is tilted towards the positive side. AUD/USD is trading 0.19% higher at 0.6592, NZD/USD is up 0.07% while USD/CAD also rose 0.03%. EUR/USD saw an early gap lower and never closed the gap in the Asia session, mainly driven from political uncertainty in France snap election and further uncertainty within the EU. GBP/USD is also down 0.03%.

North American session

The USD fell sharply on a strong 272k rise in the US non-farm payroll, coupled with a 0.4% increase in average hourly earnings, despite unemployment moving up to 4.0% from 3.9% as the Household Survey sharply underperformed the payroll. USD/JPY bounced from near 155.50 to trade above 157 before a modest correction lower, but most pairs saw the USD finish near the highs. EUR/USD tested 1.08 after trading near 1.09 before the US data. EUR/GBP fell to .8490 from .8510 as GBP/USD slippage failed to threaten 1.27.

Canada’s employment report was in line with expectations with a 26.7k increase and a rise in unemployment to 6.2% from 6.1%, but did show an unexpected acceleration in wages. USD/CAD bounced above 1.37 on the data releases and extended gains to 1.3750 but AUD/CAD was weaker as AUD/USD fell clearly below .66.