Asia Summary and Highlights 9 May

Asia Session

The broader risk asset market is choppy on Friday. Some follow through selling momentum dominated in early Asia but as session progress and supportive headlines from China surface, the overall risk mood improves. Apart from property market supporting measures, the Chinese January to April export is not as bad as some anticipates due to tariff impact.  AUD/USD is trading 0.1% higher at 0.6406 after a session low of 0.6371, NZD/USD is still down 0.14% at 0.59897 while USD/CAD slips 0.05%.

The March Japan labor cash earning continues to grow above 2% at 2.1% y/y but has slowed from the previous sub 3% level. While it is before the 2025 spring wage negotiation, the uncertainty from potential tariffs may have deterred the pace of wage hike in Japan. On the other hand, we have a recovery in household spending to 2.1% y/y, suggesting consumption is set to further recover. USD/JPY is trading 0.27% lower at 145.5 with JGB outperform U.S. Treasury Yields. Else, EUR/USD 0.04% and GBP/USD is down 0.07%.

North American session

The GBP saw a brief dip on a 25bps BoE easing, but with the BoE proving less dovish than expected the GBP quickly more than fully erased its dip. EUR/GBP, after a brief bounce above .85, saw a sustained dip to .8470. GBP/USD however, after rising to 1.3340, saw a marginal fresh low for the day below 1.3240 as the USD saw broad based gains.USD strength was led by optimism on trade. The deal with the UK provided some support, but details showed only moderate benefits for each side with 10% US tariffs still mostly intact. The main boost came from comments from 

Trump suggesting that tariffs on China could be reduced if weekend talks went well, while he also recommended buying equities, which the market duly did. USD/JPY rallied to touch 146 from near 144.50, while EUR/USD fell to 1.1225 from above 1.13. USD/CAD rallied to 1.3925 from 1.3875 despite BoC Governor Macklem stating the tariff threat had eased somewhat, while AUD/USD saw lows below .64.