European Summary and Highlights 22 July
The JPY made gains in late Asia/early European trading, dropping a figure to 156.30 before making a modest recovery through the European morning.
European morning session
The JPY made gains in late Asia/early European trading, dropping a figure to 156.30 before making a modest recovery through the European morning. The AUD also saw a dip in late Asia, but held around 0.6660 through the European morning, while European currencies were little changed against the USD.
There was no data of note, but there were some comments from Toshimitsu Motegi, secretary general of the ruling LDP, who said the Bank of Japan should more clearly indicate its resolve to normalise monetary policy, including through steady interest rate hikes, and that excessive yen declines were negative for Japan's economy. The reports came in the Nikkei in mid-morning European time, and didn’t appear to trigger JPY losses, but knowledge of the statement may have been behind the JPY gains earlier in the session.
Asia session
In early Asia, Joe Biden released a statement on X (Twitter), that he will be pulling out of the presidential race, instead focus on finishing the remaining term. He later endorses Kamala Harris to be the next presidential nominee for the Democratic Party. While it is widely speculated after his debate with Trump, it is official now and Kamala will very likely be the one racing against Trump after Joe's endorsement. The market reaction is rather muted as we only see a mild dip in U.S. Treasury Yields after the broadly lowering opening gap of USD were being closed in most major pairs. USD/JPY is trading 0.05% higher at 157.45.
The PBOC cut its 7-day reverse repo, 1 and 5 years loan prime rate by 10bps and announced it was lowering collateral requirements for medium term lending facility loans. It is aiming to support the sluggish economy but the Chinese equity market continue to dip for the day, suggesting it may not be sufficient to reinstate market confidence in another economic boom. The AUD/USD is dragged lower by 0.21% to 0.6671, so as NZD/USD to 0.5996 while USD/CAD rose 0.03%. Else, EUR/USD is up 0.06% and GBP/USD up 0.03% from Friday's close but both have erased most gains in the session.