Asia Summary and Highlights 28 March
Japan Tokyo February headline CPI +2.9% y/y
China president Xi says US-China relations should stay stable, healthy
Asia Session
Japan's Tokyo CPI stays elevated with headline at 2.9% y/y, ex fresh food 2.4% and ex fresh food & energy at 2.2%. The report does not only points toward transitory inflation, but also underlying inflationary pressure. The BoJ will be supported for their next hike, though the latest U.S. tariffs may affect their decision and make the BoJ to wait for more clarity on the scenario before acting. USD/JPY is down 0.13% to 150.83 with JGB yields falling faster than U.S. counterpart.
The broader risk atmosphere is sour on the last trading day as market participants reflect on the consequence from Trump's auto tariffs. The backdrop remains uncertain but it is reported that Carney and Trump will be talking over the weekend. Major equity indexes are all in the red. AUD/USD is down 0.31% to 0.6285, NZD/USD is down 0.45% to 0.5714 while USD/CAD rose 0.06%. Else, EUR/USD is down 0.11% and GBP/USD down 0.07%.
European and North American sessions
USD/JPY advanced to near 151 in Europe and marginally extended the move in North America, quickly rebounding from a brief dip as early gains in equities lost momentum. USD/CAD rose above 1.43 from a low of 1.4260. EUR/USD extended gains from near 1.0750 above 1.08 as equities lost ground before stabilizing near the figure. GBP/USD gains from near 1.29 peaked below 1.30. AUD/USD was fairly stable.
Focus was on trade tensions and US data, even trade, had little impact. February’s advance goods trade deficit corrected to $147.9bn from $155.6bn in January, but was significantly wider than expected. Initial claims at 224k from 225k remain low. Q4 GDP was revised up to 2.4% from 2.3% but core PCE prices were revised down to 2.6% from 2.7%. Later February penning home sales recovered by 2.0% after a 4.6% January decline.