Asia Summary and Highlights 21 May

Asia Session

As USD/JPY challenges pre-CPI high at 156.8, we begin to hear from Suzuki his resumption of verbal intervention. And as usual, verbal intervention has little impact towards FX rate unless it demonstrates a sense of urgency. The USD continues to trade broadly higher with soft U.S. Treasury Yields. USD/JPY is trading 0.15% higher at 156.48 with 10yr JGB yields approaching one percent.

AUD/USD initially spiked higher when the RBA meeting minutes suggest that tightening were still on the table and there were certain hawkish element in the minutes when market participants are anticipating a cut soon. However, the spike quickly reversed when news crossed the wire that Australian telecommunications giant Telstra will be slashing up to 9% of its workforce, further exacerbated by negative regional risk sentiment. AUD/USD is trading 0.18% lower at 0.6655, NZD/USD is down 0.12% to 0.6098 while USD/CAD rose 0.09% with oil following the overnight slip. Else, EUR/USD is unchanged and GBP/USD up 0.01%. 

North American session

USD/JPY bounced from near 155.75 above 156 early in the session eventually extending to 156.25. Movements elsewhere were modest though the USD made modest gains versus AUD and CAD, was slightly weaker versus GBP and little changed versus the EUR around 1.0860.

There was no significant data but plenty of Fed speakers, with Bostic, Barr, Jefferson, Daly and Mester all suggesting cautions towards easing given stubborn inflation. There were no major revelations, though Mester said she no longer favored three rate cuts in 2024.