Asia Summary and Highlights 9 May

Asia Session

BoJ summary of opinion shows more hawkish members as more calls for steady rate hike to cover inflation overshooting. However, the subsequent disappointing wage data brings out the caveat, BoJ only supports rate hike if inflation continue to be higher. The March cash earning shows an increase of 0.6% y/y, missing estimates of 1.5% and slowed from 1.8% in February. It is disappointing because it is in March when the wage negotiation showed the most progress and should have witnessed stronger growth.  USD/JPY rebounded from session low at 155.14 to 155.61 and is up 0.08% for the session with both the U.S. Treasury and JGB yields higher.

Regional sentiment is more vibrant than their U.S. counterpart even when Country Garden (Chinese property developer) says it will delay bond payment. Aussie seems to be dragged slightly lower by 0.06% against the USD to 0.6575 with NZD/USD also down 0.06% to 0.6000 while USD/CAD rose 0.07% to 1.3729. Else, EUR/USD is down 0.05% and GBP/USD is down 0.07%.

North American session

In a session with little news the USD was little changed. USD/JPY held from around 155.60 while EUR/USD was neutral near 1.0745. GBP/USD and AUD/USD were marginally firmer with EUR/GBP slipping back below .86. EUR/CHF also saw marginal losses. USD/CAD lost 30 pips to 1.3730. Fed’s Collins suggested rates would remain higher for longer.