Asia Summary and Highlights 14 Feb

Asia Session

Following the strong overnight U.S. CPI, USD/JPY has jumped past 150 figure to a high of 150.88. We are hearing verbal intervention from Suzuki saying that he is closely watching FX market moves with strong sense of urgency. While in a medium run, the JPY should correct on yield differential narrowing, the BoJ and Japanese Finance Ministry may react to short term slump in the JPY as any sharp movements are unfavorable for Japan, especially at such extreme level against the USD .  On its mark, USD/JPY dropped 0.19% to 150.48.

The USD has retraced a part of its gains on Wednesday Asia, along with U.S. Treasury Yields, after a strong Tuesday. U.S. equities are few points in the red while regional equities are performing individually.  Both the AUD and NZD caught a breath against the USD and see AUD/USD up 0.21% to 0.6467 and NZD/USD up 0.27% to 0.6077 while USD/CAD slipped 0.05% to 1.3556. Elsewhere, EUR/USD is up 0.06% and GBP/USD is up 0.1%.

North American session

The USD surged higher through the North American session as US CPI came in stronger than expected, rising 0.4% core and 0.3% headline in January. The AUD was the biggest loser, falling more than 1% against the USD to 0.6450, while the JPY lost almost as much, rising almost 1% to 150.75. USD/CAD also rose by around 1% to 1.3575. EUR/USD fell less than a figure to test 1.07.

The bulk of the USD’s gain came soon after the data but there was no significant correction. The afternoon saw UST yields extend their gains and equities extend their losses. The USD gained momentum in the afternoon versus JPY, AUD and CAD while EUR and GBP were more stable. 

Ahead of the CPI the NFIB small business optimism fell to 89.9 in January from 91.9, reaching its lowest since May.