Asia Summary and Highlights 10 January

Asia Session

The thought of low inflation or even deflation seems to have been craved not only to Japanese residents, but also officials as Japan Eco Min Akazawa is still talking about the deflationary mindset in his remarks. It does not sound like someone who is confident that the Japanese inflationary picture is enough despite headline CPI above 2% for a sustained period of time and the November Household Spending back to growth of 0.4% m/m.  USD/JPY is little affected and is trading 0.17% higher at 158.36.

The broad risk sentiment remains soft across regional with regional sentiment performing worse than U.S. major equity indexes. The latest Australian household spending in November came in lower than estimate at +0.4% m/m, continue to points towards a weak consumer demand. AUD/USD is down 0.02% to 0,6195, NZD/USD is down 0.1% to 0.5594 while USD/CAD rose 0.1%. Else, EUR/USD is down 0.02% and GBP/USD is down 0.11%.

North American session

With markets partially closed for the funeral of President Carter, it was a quiet session. EUR/GBP came of the highs to around .8370 while GBP/USD edged above 1.23. EUR/USD was stable near 1.03. USD/JPY recovered from a dip to a low of 157.58 to return above 158. 

There was no US data but some Fed talk, with Collins, Harker and Schmid seeing a cautious approach to easing while still expecting some lowing of rates, while Bowman suggested that no more easing was needed.