Asia Summary and Highlights 27 Feb
Tokyo CPI Dips Further Below 2%
Asia Session
The headline Tokyo CPI for February stays low at 1.6%. Ex fresh food is also below target range at 1.8% while ex fresh food and energy arrived at 2.5%. While it eases the pressure for the BoJ to hike immediately, it is worth noting a big part of moderation comes from base effect and latest round of energy stimulus. USD/JPY is trading 0.27% lower at 155.67 with JGB yields lower across the curve.
The broader risk atmosphere is undecided on the last trading day as geopolitical tension remains unresolved. U.S. major equity indexes are performing individually while HSI and Japanese equities outperforming Chinese equities. Precious metal is little changed. AUD/USD is trading 0.28% higher at 0.7125. NZD/USD is trading 0.21% higher while USD/CAD slips 0.11%. Else, EUR/USD is up 0.1% and GBP/USD is up 0.05%.
European and North American sessions
After a quiet European morning the USD advanced in North America as equities came under pressure, particularly versus the riskier currencies, but came off its highs in the afternoon as equities came off their lows, assisted by signs of progress in US-Iran talks.
USD/JPY moved from marginally below to marginally above 156 but EUR/USD was little changed near 1.18, while USD gains versus AUD and CAD were also largely erased. GBP underperformed as the results of a by-election where the ruling Labour Party was struggling to hold a previously safe seat were awaited, with GBP/USD falling below 1.35 from 1.3550 and EUR/GBP rising to .8750 from 8720. While UST yields slipped, Gilt yields slipped further.
Data showed US initial claims up to 212k from 208k but still below expectations. Fed’s Miran called for four 25bps easings in 2026.