Asia Summary and Highlights 20 Mar

Asia Session

Sell the fact trades continue to play out in USD/JPY. It has been a one way traffic since the BoJ exit negative interest rate on Tuesday. The lack of signalling further tightening seems to be the key reason to fuel such move. If the pace of rally in USD/JPY does not slow, we could expect verbal intervention reaching the headline soon. Yet, in a medium run, USD/JPY should tilt to south as the fundamental has shifted. USD/JPY is trading 0.38% higher at 151.42.

Regional sentiment is mostly positive but U.S. 3 major equity indexes are in the red. AUD/USD is unchanged for the session, NZD/USD down 0.1% to 0.6045 while USD/CAD is up 0.04% as oil is little changed for the session. Else, EUR/USD is up 0.03% and GBP/USD is up 0.01%.

North American session

The JPY continued to weaken, with USD/JPY gaining another half a figure through the North American session to near 151, while the USD otherwise generally edged lower, with EUR/USD rising 20 pips to 1.0865. USD/CAD initially rose strongly after weaker than expected Canadian CPI data to trade above 1.36, but reversed gains by the European close, trading back around North American opening levels at 1.3560. The CHF also lost a little ground against the EUR, with EUR/CHF rising 20 pips to 0.9645, but was little changed against the USD. 

February’s Canadian CPI saw an unexpected fall to 2.8% yr/yr from 2.9% in January and 3.4% in December, putting the series at its lowest since March 2021. February US housing starts saw a stronger than expected 10.7% increase to 1521k though have still not fully reversed January’s 12.3% decline, which was hit by weather. Permits were also stronger than expected, up a modest 1.9% to 1518k after a 0.3% decline in January.