Asia Summary and Highlights 15 January

Asia Session

Former Japan MoF vice minister for international affairs., Tatsuo Yamasaki, says Trump and Japan can work together to send USD/JPY lower. While it is definitely the best option to keep a lid on USD/JPY, you can only clap with both hands and we haven't heard from Yellen nor Trump on such proposal. On the other hand, BoJ's governor Ueda is once again brewing hope for a rate hike with his remarks on will raise rates if improvement in economy & price conditions continues and being positive about wage. However, we have been here before and whether Ueda is brewing false hope again will only be known when we hear "leaks" a day before the BoJ meeting. So far, market participants are buying the story and see USD/JPY lower 0.26% at 157.52.

The equity market shows indecisiveness on Wednesday after a minor rebound on Tuesday. Major equity indexes are tilted towards the down side but range bound. The FX market is also relatively quiet except the JPY. AUD/USD is trading 0.02% lower at 0.6193, NZD/USD is unchanged at 0.5604 while USD/CAD is up 0.05% as oil slips thirty cents. Else, EUR/USD is down 0.04% and GBP/USD is down 0.08%.

North American session 

December US PPI with a 0.2% increase, with the ex food and energy rate unchanged, was weaker than expected, but a USD dip on the data was quickly erased. The USD did however build losses later on, led by EUR/USD rising marginally above 1.03 from near 1.2050. GBP/USD recovered above 1.22, but earlier EUR/GBP gains were sustained. USD losses versus AUD and CAD were modest while USD/JPY was little changed near 158. Equities and USTs were mixed but the UST curve steepened.