Asia Summary and Highlights 28 May
RBNZ Cut by 25bps
Japan is reportedly offering to buy up to $6.94 billion worth of US semiconductors
Japan finance minister Kato will closely monitor bond market situations
Asia Session
The RBNZ Cut by 25bps as expected to 3.25%. There are also revision to their forecast with OCR to 3.12% in September 2025 and 2.87% in June 2026, both lowered from previous forecast. However, the forecast for annual CPI in June 2026 is also revised lower to 1.9%. Yet, NZD/USD jumped to a session high of 0.5979 as the board voted 5 to 1 for the cut before retracing partial gains to trade 0.09% higher at 0.5953 currently. Market participants are reading that as more uncertainty for the coming cuts and results could remain fluid on economic and global development. AUD/USD is trading 0.15% lower at 0.6433 while USD/CAD rose 0.13%. The broad equity market is performing individually.
Headline crossed the wire on Wednesday that Japan is offering to buy up to $6.94 billion worth of US semiconductors, according to the Asahi newspaper. This is the kind of headline you would love to see if you are looking towards a U.S.-Japan trade deal, especially after the change of winds in the past two weeks from the Japanese side on total exemption from tariffs. USD/JPY is trading 0.09% higher at 144.45 with U.S. Treasury Yields outperform JGB yields. JGB yields are being suppressed by BoJ governor Ueda's comment on bond market volatility. Else, EUR/USD is down 0.17% and GBP/USD down 0.23%.
North American session
After seeing an early correction from European gains, the USD advanced modestly to reach fresh highs after a stronger than expected May consumer confidence index, up to 98.0 from 85.7. moving above March’s level as well as April’s. Earlier April durable goods orders had fallen by 6.3% after a 7.6% March increase, with a 0.2% rise ex transport after a 0.2% March decline, both a little stronger than expected but with little market impact.
USD/JPY advanced from near 144 to a high of 144.45 before slipping back to 144.30. EUR/USD slipped from 1.1370 to a low of 1.1324 before settling near 1.1335. GBP/USD found support at 1.35. AUD/USD was quiet near .6450 but USD/CAD advanced above 1.38 from 1.3765. Despite the strong data UST yields slipped but equities were stronger.