Asia Summary and Highlights 19 July

Asia Session

While it is a relatively quiet Friday Asia session in the FX market except the Kiwi, we have the Japan June National CPI staying elevated. The National Headline CPI came in at 2.8% y/y, ex fresh food 2.6%, ex fresh food and energy 2.2%. If you only look at CPI, it would be supportive for BoJ's next step in less easing. But there are signs consumption is lagged behind and that is no what BoJ want to see in in the inflationary dynamics, suggesting BoJ steps will not be a big one by the end of July. USD/JPY is trading 0.03% higher at 157.41 with U.S. Treasury yields outperforming JGB's. 

The Kiwi is leading the fall against the broadly strong USD on Friday Asia session. Regional risk sentiment is weak while U.S. three major equity indexes are performing individually.  NZD/USD is down 0.36% to 0.6023, AUD/USD fared better with -0.11% to 0.6698 while USD/CAD is unchanged. Else, EUR/USD is down 0.1% and GBP/USD is down 0.05%.

North American session

There was little FX reaction to the ECB decision to leave rates unchanged as expected with the statement fairly neutral. US data was mixed with initial claims bouncing to 234k from 223k though but an unexpectedly strong July Philly Fed index of 13.9 from 1.3, also generating little response, though with the claims rise seen influenced by Hurricane Beryl the Philly Fed may have been more significant. ECB’s Lagarde said that risks to growth were on the downside and the September decision was wide open.

AS the session built the USD saw broad based gains, particularly in late trade when UST yields picked up. EUR/USD fell below 1.09 from 1.0935 with post-ECB dips in EUR/GBP and EUR/CHF reversing. EUR/JPY made modest gains as USD/JPY rose from near 156.50 to 157.40. Equities were weaker and AUD/USD slipped to .67 from .6740 while USD/CAD rose to 1.3715 fr9om 1.3680.