Asia Summary and Highlights 2 July
Japan finance minister Suzuki and his usual jawboning
Australia ANZ Inflation expectations rose to 5.2%
Asia Session
USD/JPY continues to stay above 161 and is quickly approaching Monday's high at 161.72. Suzuki came in with his usual jawboning and does not seem to be doing much on stalling JPY's weakness. While it sounds like an escalation in rhetoric, USD/JPY remains at the mercy of USD. Despite U.S. Treasury Yields are outpaced by JGB yields, USD/JPY is trading 0.16% higher at 161.67.
Regional sentiment is mostly positive with Nikkei leading while U.S. three major equity indexes are not upbeat. And with USD trading broadly higher, the stronger Australian inflation expectation did not help to bring the Aussie higher as little expects the RBA to tighten. AUD/USD is trading 0.24% lower at 0.6642, NZD/USD slipped more by 0.35% to 0.6054 and USD/CAD rose 0.12% to 1.3752. Else, EUR/USD is down 0.08% and GBP/USD is down 0.13%.
North American session
The USD saw only a very brief bounce on weaker ISM manufacturing with UST yields moving higher, led by the long end, in part of the increased likelihood of Trump winning the election. The USD saw modest gains, USD/JPY up around 20 pips to near 161.50 and EUR/USD down 20 pips to near 1.0735. USD/CAD saw a particularly strong bounce, by around 50 pips to 1.3740.
June’s ISM manufacturing index slipped to 48.5 from 48.7 with prices paid down to 52.1 from 57.0. May construction spending data was also subdued, down by 0.1% on the month.