Asia Summary and Highlights 3 Jun
BoJ's Ueda says Japan’s real wages are negative, wage growth may slow then rebound
RBA May meeting minutes says not yet time to move monetary policy to an expansionary setting
Australia raises its minimum wage by 3.5% according to Reuters
Asia Session
The RBA's May minutes has captured some eyeballs and Aussie offers as it officially shows the consideration of more easing from the RBA. It is also reported by Reuters that Australia will raise its minimum wage by 3.5% but shorter than union expectation of more than 4%. Yet, the last straw for Aussie is the contracting CAIXIN manufacturing PMI at 48.3, a level last seen in 2022. AUD/USD is down 0.5% to 0.6465, NZD/USD is also down 0.44% to 0.6010 while USD/CAD rise 0.15%. Regional equities are outperforming U.S. major equities even with Chinese equities that retreated from session high.
BoJ's Governor Ueda hinted there will be no imminent hike by raising concern on real wage growth. While he is still tilted towards more tightening, there seems to be little commitment when the U.S.-Japan trade conflict persist. USD/JPY is trading 0.21% higher at 142.96 as JGB yields took a nose dive. Else, both the EUR/USD and GBP/USD are down 0.21%.
North American session
The USD remained weak in a subdued North American session. Lows were seen after May’s ISM manufacturing index fell to 48.5 from 48.7. April construction spending was also weak with a 0.4% decline. The USD attempted to recover as UST yields and equities reversed losses seen on the data but the USD recovery faded late in the session. EUR/USD peaked at 1.1450 and AUD/USD peaked at .65, USD/JPY traded between 142.50 and 143. USD/CAD moved back above 1.37 but AUD/CAD remained firmer near .89.