Asia Summary and Highlights 6 September

Asia Session

The Japan July household spending has came in lower than expected at +0.1% y/y with m/m decline. It paints a mixed picture for the BoJ as both wage and headline CPI edges up but the consumption behavior of Japanese residents are only slowly transitioning. USD/JPY continues to move lower before NFP as USD trades broadly lower along U.S. Treasury Yields. It seems to suggest market participants are tilted towards the Fed cutting no matter the outcome of NFP. USD/JPY is trading 0.59% lower at 142.59. with JGB yields also lower.  

The broad risk sentiment is generally soft on Friday's Asia session as all eyes waiting for U.S. NFP later today. Regional equity is performing worse than U.S. equities and has been dragging the antipodeans. AUD/USD is down 0.17% to 0.6728 and NZD/USD is down 0.16% to 0.6214 while USD/CAD slipped 0.08% to 1.3493. Else, EUR/USD is up 0.06% and GBP/USD is down 0.02%.

North American session

The USD slipped on a weaker than expected 99k rise in August’s ADP employment report, EUR/USD reaching a high of 1.1120 and USD/JPY reaching a low of 142.85 though shortly after a fall in initial claims to 227k from 232k gave the USD some support. After the August ISM services index edged up to 51.5 from 51.4 the USD gained some momentum, EUR/USD falling to a low of 1.1075 and USD/JPY rising to a high of 144.23, though the bounce subsequently faded and the USD ended little changed, EUR/USD near 1.11 and USD/JPY near 143.40.

Moves elsewhere were marginal though GBP. AUD and CAD managed marginal gains in the afternoon as equities came off lows and UST yields slipped. US data also saw a downward revision to Q2 unit labor costs, to 0.4% annualized frim 0.9%, released alongside initial claims.