Asia Summary and Highlights 12 February

Asia Session

The Japan Industry Minister has requested the US exclude Japan from steel & aluminum tariffs but it looks unlikely until there is further commitment from Japan's investment plan into the U.S.. USD/JPY continues its rebound from sub-150 figure as USD gained strength from tariff man's negotiation tactics. USD/JPY is trading 0.74% higher at 153.62. It is worth noticing that 10yr JGB yields continue to march towards new decade high, which may curb the pair's gains in a medium run.

The broad equity market are performing individually on Wednesday as HSI leads while U.S. and Chinese equity indexes lagged. Trump said that "we'll see" when asked if reciprocal tariffs are coming Wednesday, continue to play along with his tariff negotiation tactic and keep the risk sentiment volatile. AUD/USD is down 0.07% to 0.6290, NZD/USD is unchanged while USD/CAD rose 0.09% as oil slips. Else, EUR/USD is down 0.04% and GBP/USD is down 0.02%

North American session

While he stated there was no hurry to cut rates Fed Chairman Powell’s testimony to the US Senate brought few surprises, and the USD mostly slipped during the testimony, which was extended with a late move. EUR/USD advanced to 1.0365 from 1.0320 while GBP/USD rose to 1.2445 from 1.2370. USD/CAD saw a late move below 1.43 while AUD/USD tested 0.63. USD/JPY in contrast held firm, advancing above 152.50.  

Before Powell spoke Fed’s Hammack sounded quite hawkish, calling for rates to be held for some time, but got little response from a market that was waiting for Powell.  Fed's Williams was more balanced late in the session.