Asia Summary and Highlights 24 June

Asia Session

As USD/JPY approaches 160 figure, we have Kanda's jawbone intervention with the regular stuff. He is keeping it "mysterious" with no comment on FX level and will not comment if recent forex moves are excessive. It is no doubt 160 will be intervention zone from market participant's mind but the essence of intervention is always its unpredictability. If history is lesson, even when on their toes, speculators will challenge the level gradually until fundamental/momentum shifts or met with intervention. The June BoJ summary of opinion also provide us no surprises, members are split between waiting for more confirmation of achieving inflation target and hike rates swiftly. The consumption drag and fx weakness are on their mind. USD/JPY is trading unchanged at 159.75 despite 10yr JGB yields approaching 1% again. 

Regional sentiment is weak with Japan's Nikkei being the exception. U.S. three major equity indexes are all in the red.  The AUD/USD reached a session low of 0.6626 before slightly rebounding to 0.6637 along with Chinese equity. NZD/USD also slipped by 0.11% to 0.6111 while USD/CAD rose 0.05% to 1.3695 but oil had erased earlier losses. Else, EUR/USD is trading 0.02% after closing the opening gap and GBP/USD is unchanged.

North American session

The USD bounced after June S and P PMI data came in stronger than expected, extending May’s gains to see manufacturing at 51.7 from 51.3 and services at 55.1 from 55.8, the latter the strongest since April 2022. However for most pairs the USD gains were modest and not sustained, stabilizing near pre-US data levels, with EUR/USD holding below 1.07. However USD/JPY extended gains above 159.50 from pre-data levels below 159.

 USD/CHF also sustained a modest bounce, as EUR/CHF continued to reverse European losses, moving above .9560 after seeing lows below .9510.