Asia Summary and Highlights 12 Mar
Japan’s finance minister Suzuki thought it was too early to say deflation was beaten and also not at a stage where Japan can avoid the risk of falling back into deflation
Ueda emphasis again the Bank needs to see wage talk results before any policy change
Asia Session
And here we go, the headline game begins as we are getting closer and closer to the result of wage negotiation and BoJ monetary policy change. Japan’s finance minister Suzuki thought it was too early to say deflation was beaten, also not at a stage where Japan can avoid the risk of falling back into deflation and Ueda emphasis again the Bank needs to see wage talk results before any policy change. This pushed back against hawkish speculation from market participant of an imminent policy change in the March meeting next week. USD/JPY rebounded 0.29% to 147.35 after dipping to 146.62 while JGB yields are still outperforming the U.S. counterpart.
Regional sentiment is performing individually with the HSI up 2% on more share buy back anticipation while Chinese equity softens and Nikkei continue to correct. U.S. equity indexes are in the green and seems to be supporting both the Aussie and Kiwi to be 0.08% higher against the USD. USD/CAD is also down 0.08%, EUR/USD up 0.12% and GBP/USD up 0.08%.
North American session
The USD saw some gains in a mostly quiet US session led by UST yields where the front end led yields higher, despite a respectable 3-year auction reception. The New York Fed’s Survey of Consumer Expectations showed the inflation view more than fully reversing a dip in January, rising to 2.71% fir February’s 3-yaer view from 2.35%, bouncing back above December’s 2.62%.
EUR/YSD saw a low of 1.0915 and USD/JPY a high of 147.16. EUR/GBP edged higher as GBP/USD saw lows below 1287. The commodity currencies saw less change, early gains in USD/CAD above 1.35 failing to hold.