Asia Summary and Highlights 16 June
BOJ hikes to 1%
RBA keep rate unchanged at 4.35%
Asia Session
As per forecast, the BoJ has hiked rates by 25bps to 1% with a 7-1 vote. Bond purchase tapering will stop from April 2027, at 2 trillion JPY per month while the existing trajectory of 200 billion cut per quarter persists. The BoJ will no longer conduct interim assessment on bond purchase but will always be ready for yield spikes. It looks like a well balanced move from the BoJ to cope politically. USD/JPY is trading 0.06% lower at 160.23.
The RBA has kept rates unchanged at 4.35%. It is what the RBA has told us in the previous meeting and seems they have not changed their mind. While they see inflation to be still high, there is no rush in their language to hike further, especially when oil price is moderating. AUD/USD is trading 0.25% lower at 0.7053. NZD/USD is trading 0.28% lower while USD/CAD rises 0.15% as oil treads lower. Major equity indexes are consolidating recent gains. Else, EUR/USD and GBP/USD are down 0.1%.
North American session
The USD saw some correction from its losses seen in the aftermath of the US-Iran peace deal, guided by UST yields gradually reversing their losses. USD/JPY held above 160 and picked up to 160.30, while EUR/USD fell below 1.16. There was not much movement in EUR/GBP or EUR/CHF. AUD/USD was also little changed though USD/CAD saw marginal gains.
US data was on the soft side of expectations. June’s Empire State manufacturing index slipped to 5.7 from 19.6, May industrial production rose by only 0.1%, with manufacturing unchanged while June’s NAHB homebuilders’ index slipped to 35 from 37.