European Summary and Highlights 23 Jan

European morning session
The USD was generally firmer through the European morning, with the EUR losing ground on the crosses after another weak ECB bank lending survey. EUR/USD fell back around 40 pips to 1.0870, while the USD was also generally stronger elsewhere, except against the JPY. USD/JPY fell sharply early in the European morning, hitting a low at 147, but bounced back to finish the session little changed at 147.85. 
The JPY move was a response to the Ueda press conference. He signalled there is more confidence in wage growth as more big firms had decided to hike wage this year. The focus of BoJ remain on wage/inflation dynamics as they see current above target inflation not sustainable until wage growth further pick up towards 2%. Specifically, Ueda hinted that the next move in policy will be in April as they suggest they will have more data at April meeting compared to March. Moreover, Ueda restated that even if real wages are negative, a policy change is possible.
The Q4 2023 bank lending survey (BLS) saw EZ banks moderately tighten their credit standards further for loans in the last quarter of 2023. For ECB hawks, who have suggested that the fall in market interest rates in the last few months constitutes an easing in financial conditions, the BLS points very much in the opposite direction.  Indeed, it adds to the substantial cumulative tightening in credit standards since 2022, which has contributed, together with weak demand, to the strong fall in loan growth to firms and where there has also been a marked cumulative fall in credit demand. However, the tightening was less marked than in the previous quarter and there was little sign that the fall in deposit volumes was having much impact in affecting credit supply
Asia session
As most expected, the BoJ meeting on Tuesday did not see any fireworks. There is no change to monetary policy and forward guidance while the BoJ patiently waiting for the spring wage negotiation to confirm the momentum in wage growth. Apart from monetary policy, the BoJ has revised fiscal 2024 CPI less fresh food revised lower to 2.4% from 2.8%. USD/JPY initially spiked to 148.54 before trading lower at 147.96, down 0.08% for the session with U.S. Treasury Yields lower across the curve so as 10yr JGB. 
Bloomberg reported on Tuesday that China is planning a stock market rescue package backed by $278 bln, mainly from the offshore accounts of Chinese state-owned enterprises, as part of a stabilization fund to buy shares onshore through the Hong Kong exchange link. Regional sentiment improve substantially and rebounded from yearly low. AUD/USD is trading 0.55% higher at 0.6605, NZD/USD is also 0.47% higher at 0.6104 while USD/CAD is 0.14% lower at 1.3460. Elsewhere, EUR/USD is up 0.19% and GBP/USD is 0.21% higher.