Asia Summary and Highlights 14 June
BoJ keep rates on hold and did not cut bond purchase this month
Forward guidance suggest BoJ will decide bond purchase cut in July
Asia Session
The BoJ once again surprise market participants with no change to bond purchase program nor rates. They did guide that the planning for bond purchase cut will be decided in July. It came as a surprise to market as Ueda hinted such, so as multiple 'source" news report, not to mention wage and inflation both picked up to above 2%. The uncertainty in economic outlook and price setting behavior seems to be the key reason led BoJ to this decision. USD/JPY is trading 0.61% higher at 157.94 with U.S. Treasury Yields up across the curve and JGB yields sunk.
Regional sentiment is mixed with Chinese and Hong Kong equities in the red while Nikkei cheers on BoJ's inaction. U.S. three major equity indexes are all in the green. The Aussie is dragged by mixed sentiment and USD strength and see AUD/USD down 0.15% to 0.6626, NZD/USD also 0.25% lower at 0.6153 while USD/CAD slipped 0.02% with oil up thirty cents. Else, EUR/USD is down 0.02% and GBP/USD down 0.09%.
North American session
The USD ended stronger despite seeing a dip on weaker than expected US data, May PPI falling by 0.2% with ex food and energy unchanged, while initial claims rose sharply to 242k from 229k.
The USD advance was led by EUR/USD which after bouncing above 1.08 on the data fell below 1.0750. The USD ended little changed versus GBP, AUD and CAD. USD/JPY ended near 157, still below pre-data levels, but well above its lows, as EUR/JPY fell a big figure to see lows below 168.50. USD/CHF was also softer, as EUR/CHF fell to .96 from .9670.