Asia Summary and Highlights 21 February

Asia Session

The Japan national CPI has Jumped to 4% in January with ex fresh food at 3.2% and ex fresh food & energy at 2.5% y/y. The jump continues the latest uptrend as a big chunk of inflation came from food and energy products, underlying inflation should be dismissed as well. While data like this should be generally JPY supportive, Japan’s Finance Minister Katsunobu Kato warned that rising bond yields could strain the country’s finances. Multiple officials are echoing his concern and see JPY offered in fear of an intervention in the bond market. USD/JPY rose 0.51% to 150.39.

Regional sentiment is led by the strong gains in HSI (more than 2%) and decent Chinese equities gains, U.S. three major equity indexes also have their toes in the green. The AUD/USD is trading 0.1% lower at 0.6394, NZD/USD is up 0.02% while USD/CAD is unchanged. Else, EUR/USD is down 0.05% and GBP/USD is down 0.07%.

North American session

The USD drifted lower through the North American session with EUR/USD leading the way with a rise to 1.05, though gains in EUR/GBP were modest. AUD/USD reached 0.64 while USD/CAD fell to 1.4175. USD/JPY slipped as low as 149.40 before correcting. 

There was no major story behind the move. US data had little impact, with initial claims rising to a still low 219k from 214k and February’s Philly Fed manufacturing survey slipping to a still healthy 18.1 from 44.3. Fed talk was mixed, with Bostic on the dovish side but Musalem more hawkish.