Asia Summary and Highlights 10 Apr
Japan FM Katayama says govt ready to take decisive action but won’t elaborate
Iranian state media denied that a delegation had arrived in Islamabad for weekend talks with the U.S.
Asia Session
As USD/JPY resume upward traction, we are hearing from Japan FM Katayama that government is ready to take decisive action. At the same time, Japan announced they plan to release more oil reserves and shifting supply away from Hormuz routes. USD/JPY is trading 0.14% higher at 159.15 with short end JGB yields hovering at recent high.
A complete ceasefire hop dimes as Iranian state media denied delegation arriving in Islamabad for weekend talks with the U.S., citing Lebanon ceasefire a must before any progress. Market participants seem to be optimistic about further de-escalation and see major equity indexes upbeat. AUD/USD is trading 0.24% lower at 0.7066 while precious meta and oil performing individually. NZD/USD is trading 0.2% lower at 0.5847 while USD/CAD rises 0.05%. Else, EUR/USD is down 0.03% and GBP/USD is down 0.11%.
North American session
Focus was on the Middle East with some optimism emerging from the news Israel was willing to talk with the Lebanese government and optimistic comments from Trump about prospects for peace and the likelihood of Israel scaling back its actions in Lebanon. This saw the USD slipping but with Israel signaling that it would continue to fight Hezbollah in Lebanon the USD moved off its lows. USD/JPY was little changed near 159 and EUR/USD slightly firmer near 1.17, with EUR/JPY above 186. EUR/GBP was little changed but EUR/CHF advanced to near .9250 from .9230. AUD/USD advanced but failed to reach .71 while USD/CAD losses failed to reach 1.38. AUD/CAD peaked at .98.
US data had little impact but was on balance on the soft side of expectations, most notably a 0.1 decline in February personal income, well below a 0.5% rise in spending that was slightly short of consensus. 0.4% gains in PCE prices, both overall and core, were firm but in line with expectations. Q4 GDP was revised down to 0.5% from 0.7%. Initial claims corrected higher to 219k from 203k but continued claims fell to 1.794m from 1.832m, reaching their lowest since May 2024.