Asia Summary and Highlights 13 May
BoJ Dep Gov Uchida says there is upside & downside risk from US tariffs on Japan's prices
Japan finance minister Kato wants to discuss FX with Bessent
Asia Session
After the euphoric Monday, headlines quiet down on Tuesday. We have remarks from BoJ's Uchida and FM Kato but there isn't anything of substance as they are also uncertain with the future development. However, market participants seems to be intrigued by Japan FM Kato's comment that he want to discuss FX with Bessent and speculates potential collaboration. USD/JPY has retraced partial Monday gains and is trading 0.47% lower at 147.75 with JGB outperform U.S. Treasury yields.
The PBoC has set the onshore reference rate to be stronger than expected, at a level last seen in April 7. It was seen as a sign that trade tension is easing. Equities are mostly reversing Monday's gains partially with Chinese equities hang on to the green. Except Japanese equities, major equity indexes are off session high with U.S. major equity indexes treading into the red. AUD/USD benefited from the proxy support and softer USD to trade 0.62% higher at 0.6412, NZD/USD is up 0.63% to 0.5891 while USD/CAD slides 0.04%. Else, EUR/USD is up 0.29% and GBP/USD is up 0.2%.
North American session
The USD marginally extended its strong European gains seen on the US-China trade deal in a session with few fresh trading triggers, comments from Treasury Secretary Bessent and later Trump having little impact. USD/JPY and ERIR/USD saw modest movement, settling a little above 148 and near 1.11 respectively. EUR/GBP slipped, but held above .84. Oil came off its highs, and the commodity currencies slipped despite equity strength, USD/CAD peaking above 1.40 before a late correction and AUD/USD slipping to .6370 from .6390.