Asia Summary and Highlights 19 Sep
BoJ kept rates at 0.5%
Asia Session
The Japan August headline CPI treads below 3% to 2.7% with ex fresh food also at 2.7%. However, ex fresh food and energy remain elevated at 3.3%, suggest underlying inflation remains solid. Such data is unlikely to sway the result of the BoJ meeting later as they are unlikely to move before the October LDP election. And indeed, the BoJ kept rates unchanged in their September meeting at 0.5% as expected, with two votes dissenting. They also announced they will begin to sell their ETF and J-REIT holdings, for about 0.05% of the trading value in the market and it seems to have led to some selling in the Japanese equity market. USD/JPY is trading 0.49% lower at 147.27 with JGB yields jumping higher.
Major equity indexes are all in the red, led by losses in Japanese equity indexes. AUD/USD is trading 0.18% lower at 0.6601, NZD/USD is trading 0.23% at 0.5869 after Thursday's slump while USD/CAD rises 0.07%.Else, EUR/USD is down 0.09% and GBP/USD is down 0.07%.
North American session
The BoE left rates unchanged but with 2 dissenting votes for easing. The GBP slipped slightly on the announcement, with losses extending through the session, but EUR/GBP gains from .8670 lost momentum ahead of .87.
US data was stronger than expected, with initial claims more than reversing a preceding spike, falling to 231k from 264k, and continued claims down by 7k to 1.92m. September’s Philly Fed manufacturing index bounced to 23.2 from -0.3. This lifted the USD across the board. EUR/USD fell to 1.1750 from 1.1820 before correcting to 1.1780. USD/JPY rose from 147.40 to 148.27 before correcting to 147.90.