Asia Summary and Highlights 13 Jan
Trump threatens 25% tariff on countries doing business with Iran
Asia Session
We are hearing more jawboning from Japan government spokesperson, warns of “one-sided” sharp FX moves after FM Katayama released a similar rhetoric hours earlier. It is understandable as JPY is once again reaching historical low and fast approaching 2025 high against the USD just below the 159 figure. USD/JPY did not react much to such jawboning and is still trading 0.39% higher at 158.75 with U.S. Treasury yields outperforming JGB yields.
Trump threatens 25% tariff on countries doing business with Iran. While it is a sign of geopolitical tension, the way Trump is dealing with Iran seems he is not seeking the Maduro style intervention for now. U.S. major equities have their toes in the red but regional equities are performing better, especially Nikkei. AUD/USD is trading 0.02% lower at 0.6708, NZD/USD is trading 0.09% higher while USD/CAD slips 0.09%. Else, EUR/USD is down 0.03% and GBP/USD is up 0.05%.
North American session
US markets saw a moderate response to the Justice Dep’t investigation into Fed Chair Powell in a session with little else for markets to focus on. With UST yields correcting early gains and equites modestly higher. USD/JPY advanced to 158.20 while EUR/USD peaked near 1.17 before correcting to 1.1665. GBP/USD held up better as EUR/GBP slipped below .8670. AUD/USD outperformed rising to .9320 while USD/CAD was little changed near 1.3880.