Asia Summary and Highlights 16 Jan
Japan FM “Won’t exclude any options”, possibility of US/Japan joint yen intervention
Asia Session
Japan’s Finance Minister Katayama continue with her tough talk on intervention. This time she said she won’t exclude any options when asked about the possibility of U.S.–Japan joint intervention. To be fair, a joint U.S.-Japan intervention is the one needed to really put a lid on JPY speculation. However, such is also much more complicated than just BoJ intervening. With JPY's losses being stalled for now, such will likely remain to be talk. USD/JPY is trading 0.24% lower at 158.22 with JGB outperform U.S. Treasury yields.
U.S. major equity indexes are outperforming their regional peers. China has begun forcing servers out of exchange data centre in Shanghai and Guangzhou, an act seems to be targeting high frequency trading firms. AUD/USD is trading 0.08% higher at 0.6704, NZD/USD is trading 0.26% higher at 0.5757 while USD/CAD slips 0.05%. Else, EUR/USD is up 0.02% and GBP/USD is up 0.05%.
North American session
US data was stronger than expected, with initial claims falling to 198k from 207k and both the Philly Fed and Empire State manufacturing surveys recording positive January readings after negative Decembers. The USD, already rising ahead of the data, but the gains faded partially in the afternoon.
USD/JPY after bouncing to 158.88 returned to near pre-data levels near 158.50 while positive equities helped AUD/USD advance to touch .67 and USD/CAD edge below 1.39. EUR/USD fell from pre-data levels around 1.1635 to near 1.16. The EUR saw gains versus both GBP and CHF.
Fed speakers varied in tone but none sounded in a hurry to ease. The US announced a deal with Taiwan that would reduce tariffs in exchange for investment in the US.