Asia Summary and Highlights 31 January

Asia Session

On Friday's Asia session, we are seeing the USD/JPY to fast approach weekly low at 153.7 but reversing traction as session progress. Expectation of another BoJ hike seems to be in play after a strong Tokyo CPI. The headline January CPI came in at 3.4% while both ex fresh food, ex fresh food & energy are both 2.5%. It points toward transitory factors contributing to the headline figure and underlying CPI should not be dismissed  USD/JPY is up 0.15% at 154.15.

The risk sentiment continues to recover on the last day of the week. Tariff man is pushing the tariff on Mexico and Canada on Saturday but has not decided whether it implies on oil too, which seems to be giving the market a glimpse of hope. major equity indexes are all in the green. AUD/USD is up 0.29% to 0.6218, NZD/USD is up 0.21% while USD/CAD slides 0.13% on more upbeat oil. Else, EUR/USD is unchanged and GBP/USD is up 0.05%.

North American session

There was not much reaction to the as expected 25bps ECB easing, or a 2.3% increase in Q4 US GDP which was a little below the published consensus but above some downgraded forecasts following Wednesday’s weak trade and inventory data. Initial claims were very low at 207k from 223k. 

The EUR did however see a spike during Lagarde’s press conference, EUR/USD peaking at 1.0467, though this faded leaving only modest gains around 1.0430. A spike in EUR/GBP to 8390 also corrected. USD/JPY saw slippage from around 154.50 to a low of 153.79 partially reversed, the moves consistent with those in UST yields.