Asia Summary and Highlights 13 Mar

Asia Session

After a week of consideration, Toyota has agreed to union wage hike demand. The union has requested the highest wage increase since 1999. The requested annual lump sum amount was equivalent to 7.6 months of standard wages and exceeds last year's request for 6.7 months. This is a good sign but another larget Japanese company, Okuma Corp, has disappointed union demand. Japan chief cabinet secretary Hayashi said it is important that wage rises spread to mid & small firms. It seems to suggest most officials are still waiting for the results of wage negotiation by the end of the week. So far, wage negotiations have exceeded expectations and is above BoJ's wage growth target of 2%. USD/JPY is trading 0.23% lower at 147.31. 

U.S. Treasuries are performing individually across the curve while risk sentiment is broadly soft, expect for HSI. The antipodeans benefited the most from softer USD. AUD/USD is up 0.09% to 0.6612, NZD/USD up 0.17% to 0.6160 while USD/CAD rose 0.03% on slightly lower oil. Elsewhere, EUR/USD  and GBP/USD is unchanged.

North American session

The USD gained some ground in the North American session, after US February CPI came in a little above expectations at 0.4% m/m for both headline and core. The initial knee-jerk USD bounce faded perhaps because the core rise was only just 0.4% (0.358 unrounded), but the USD strength soon resumed before partially and gradually unwinding in the afternoon. 

USD/JPY could not quite regain its knee-jerk highs above 148 but EUR/USD slipped to a low just above 1.09 before gradually retracing around half its losses. GBP/USD after slipping from near 1.28 to touch below 1.2750 erased nearly all of its losses. The USD ended around 0.1% higher overall.