Asia Summary and Highlights 17 February

Asia Session

The Japan Q4 GDP has came in higher than estimate at 2.8% y/y with private consumption resumes its expansion. It seems to suggest the higher wage is kicking in and the cumulated demand in the past quarter are being subsequently released. It is good to see consumption recovers but one must be wary about its sustainability as real wage remains negative for most of H2 2024, which may suggest it is the release of pent up demand rather than consumption revival. USD/JPY is trading 0.47% lower at 151.56 with JGB yields searching new high.

The risk space is having a positive start for the week with most equity indexes in the green. While the magnitude is limited, the positive sentiment spread to the FX space and see USD trading lower. The AUD/USD is 0.27% higher at 0.6368, NZD/USD is up 0.17% at 0.5740 while USD/CAD slipped 0.12%. Else, EUR/USD is up 0.09% and GBP/USD is up 0.1%.

North American session

January US retail sales were significantly weaker than expected, falling by 0.9% overall, by 0.4% ex autos and 0.5% ex autos and gasoline. UST yields dipped in response, and USD/JPY saw a quick slide from 152.75 to near 152 before a modest correction. The USD saw weakness elsewhere, but the moves were more gradual, with EUR/USD seeing highs above 1.05, GBP/USD seeing highs above 1.26 and AUD/USD moving above 0.6350. USD/CAD saw only marginal losses, finding support at 1.4150. 

After the retail sales report, January US industrial production saw a 0.5% rise overall but a 0.1% decline in manufacturing. The afternoon saw Trump threaten auto tariffs in early April.