Asia Summary and Highlights 20 Feb

Asia Session

The January National headline CPI dipped below two percent, with core CPI at 2% while core-core CPI remain above target at 2.6%. All three items are showing further moderation to begin 2026, partially due to base effect and latest round of energy stimulus. The BoJ will unlikely rethink their direction because of this data point but market participants will likely anticipate later rate hike on less inflationary pressure. USD/JPY is trading 0.15% higher at 155.23 with JGB yields lower across the curve.

Geopolitical risk lingers as we hear from Iran the usual tough talk. There has not been signs of de-escalation yet and thus weekend headlines will be fluid. Major equity indexes are performing individually. The sentiment is weighing on risk currency and send USD higher. AUD/USD is trading 0.31% lower at 0.7035. NZD/USD is down 0.42% while USD/CAD rises 0.08%. Else, both the EUR/USD and GBP/USD is down 0.18%.

North American session

The USD pushed marginally higher after Thursday economic data, with the drop in jobless claims catching most attention following the January FOMC minutes shift of tone.  However, some traders note that the wider than expected December trade deficit will mean some downside risks for Friday’s Q4 GDP release in the U.S.  Traders also note that the supreme court ruling on reciprocal tariffs could be seen Friday, but this could be risk off (USD positive) but see Trump threatening more tariffs and the USD (USD negative).