Asia Summary and Highlights 24 January

Asia Session

The BoJ hiked by 25bps to 0.5% in the January meeting by an 8-1 vote. The only dissent, Nakamura, is favoring a hike in February. The BoJ cited the alignment of economics development and wage growth with forecast to support their rationale of the rate hike. They also revised ex fresh food CPI inflation higher for 2024 to 2.7% (0.2% higher) and 2025 to 2.4% (0.5% higher) as import prices will be more expensive due to weak Yen. Market participants are viewing the January hike to be hawkish as forecast open the path for more tightening but we are viewing such with a pint of salt.The Japan December headline CPI jumped to +3.6% with core CPI also at 3%. It seems to suggest why the BoJ has been suggesting another rate hike. USD/JPY is trading 0.39% lower at 155.41 with JGB beating U.S. Treasury Yields.

In Friday's Asia session, tariff man (D. Trump) is saying he prefers no tariff on China. It seems to be different from his previous stance on hardcore tariff negotiation tactic and market is cheering on that as it suggest Trump maybe smarter this term on playing the tariff game. Regional equity market turns green with HSI leading and see USD lower. AUD/USD is trading 0.53% higher at 0.6318, NZD/USD is also up 0.52% at 0.5704 while USD/CAD slipped 0.33% with oil regaining twenty cents. Else, EUR/USD is up 0.29% and GBP/USD up 0.3%.