Asia Summary and Highlights 16 Apr

Asia Session

While Japanese cabinet's Suzuki and Hayashi both seems to have escalated their rhetoric against the JPY weakness, the broad USD strength seems to be in the driver seat. No doubt the pace of JPY weakness has been rapid and we are getting closer and closer to the intervention zone, the language Japanese officials have not been tough and seems to be unable to discourage further offer of JPY.  With JGB yields turning higher than the U.S. counterpart, the turn in USD/JPY could be swift but in this Asia session we are seeing USD/JPY to trade 0.04% higher at 154.31.

Risk sentiment is broadly weaker with major Chinese, Hong Kong and Japan equity indexes all deep in red and U.S. 3 major equity indexes could not catch a break from the overnight fall. Geopolitical tension remains the spotlight in the market as participants awaits Israel's potential response towards Iran's strike. While the market is somewhat calmer with the U.S. and Iran signaled no intention to a full blown war, the ball will be in Israel's court as Iran public stated they will return fire if Israel retaliates and thus escalating the tension in the area.  AUD/USD is trading 0.28% lower at 0.6424, NZD/USD also 0.22% lower at 0.5890 while USD/CAD rose 0.06% to 1.3795. Else, EUR/USD is down 0.08% and GBP/USD is down 0.09%.

North American session

The USD saw an early bounce as March US retail sales reported a stronger than expected 0.7% rise, 1.1% ex autos, with upward back month revisions adding further support. The USD’s bounce was briefly reversed as front end UST yields dipped on talk of an Israeli retaliation against Iran, though the positive USD tone soon resumed, particularly versus the riskier currencies, as equities turned negative.

EUR/USD slipped to 1.0625 from 1.0660 while USD/JPY rose to 154.20 from 153.95. EUR/GBP was fairly stable after European losses but EUR/CHF fell below .97 from .9730. AUD/USD fell to .6440 from .6480 while USD/CAD advanced to 1.3790 from 1.3740.