Asia Summary and Highlights 2 September
RBNZ hike rate by 25bps to 2.75% unanimously
BOJ hawk Takata says nimble rate hikes needed as inflation risks build
US strikes Iranian tankers for first time under new deterrence policy
Asia Session
Axios reported that U.S. had stroke Iranian tankers for first time under new deterrence policy. The target of attacks, including radar, mine laying and anti-ship missile capabilities, continue to points toward U.S. aim of neutralizing Iran's capability to harass the Strait of Hormoz. Oil continue to ride the waves. AUD/USD is trading 0.03% lower at 0.7142 while USD/CAD rises 0.13% as oil erases gains. The RBNZ hike rates by 25bps to 2.75% in the September meeting unanimously. It is widely expected as the overall inflationary pressure is rising and headline figure has long overshoot target range. However, the lack of changes in inflation expectation has disappointed hawks because it indicates no hawkish tilt in the future OCR path. NZD/USD sunk by 0.81% to 0.5843.
BoJ's Takata has began blowing the wind for rate hike. While he is a notable hawk, his argument for more active role from the BoJ is not wrong in the current inflationary dynamic. JPY is catching a bid on hopes of commitment from the BoJ in September. USD/JPY is trading 0.37% lower at 159.58. Else, EUR/USD and GBP/USD are down 0.08%.