Asia Summary and Highlights 3 June
Australian Q1 GDP Miss
Japan approves $19bn supplementary budget
Asia session
Australian Q1 GDP is a miss at 0.3% y/y, lowered from 0.9% in Q4 25. It looks like energy prices and other A.I. equipment import are dragging the economic growth, so as consumption and barely saved by business investment. AUD/USD is trading 0.15% lower at 0.7168. NZD/USD is also trading 0.2% lower while USD/CAD rises 0.07% higher despite higher oil. U.S. major equity indexes are lower while regional equities outperform.
To combat steadily higher energy pressure, Japan's cabinet has approved a ¥3.1 trillion supplementary budget. It is widely expected as the magnitude of extra stimulus are unlikely to be covered from special funds previously set aside. JGB yields' reaction is so far modest with only the 10yr yields rising the most by more than 2%. USD/JPY is trading just below the 160 handle at 159.89. Else, EUR/USD is down 0.06% and GBP/USD is down 0.03%.
North American session
The USD, as was oil, was higher in North America, but came off its highs in the afternoon. USD/JPY came close to 160 from 159.75 before slipping back to 159.90. EUR/USD saw lows below 1.62 from 1.1650 before correcting to 1.1635. In addition to ongoing Middle East concerns, the USD was supported by a strong 731k increase in job openings in April’s JOLTS report.
EUR/GBP slipped to .8635 from .8645 with hawkish comments from MPC’s Greene following more moderate ones from Governor Bailey. SNB’s Schlegel reiterated an increased willingness to intervene to deal with overvaluation pressure. EUR/CHF made modest gains above .9150. AUD/USD, NZD/USD and USD/CAD saw little movement.