Asia Summary and Highlights 10 March

Asia Session

The Japan January Labor Cash Earnings stayed solid above 2% at 2.8% y/y. Although it is lower than the blockbuster 4.4% in December, the 2.8% y/y wage growth is good enough to support another rate hike. However, the BoJ will very likely wait for more confirmation in the March Wage Negotiation before another one. USD/JPY is down 0.28% to 147.62 with a session low at 147.08 as U.S. Treasury Yields still away from closing the opening gap lower while JGB yields continue to march higher.

Regional sentiment is soft on Monday led by losses in the HSI and Chinese equities (dragged by China's deflation in February), U.S. three major equity indexes are also in the red while Japanese equities are in the green. The FX market is relatively quiet except the JPY pairs with some majors have a minor opening gap but at least closed once within the session. AUD/USD is trading unchanged at 0.6307 after trading up and down 20 pips, NZD/USD is up 0.06% to 0.5712 while USD/CAD slips 0.03%. Else, EUR/USD is down 0.02% and GBP/USD is down 0.11%. 

North American session

US employment data was on the weak side of expectations, with a 151k February increase, a 0.3% rise in average hourly earnings and a rise in unemployment to 4.1% from 4.0%, but not dramatically. USD/JPY slipped briefly below 147 from 147.75 and EUR/USD saw a brief bounce to a high of 1.0889 from 1.0855, though this was reversed and EUR/USD traded a narrow range for the rest of the session. GBP/USD and AUD/USD also struggled for direction. 

USD/JPY picked up from near the lows to 148 after comments from Fed’s Powell, who said the Fed was well positioned to wait for greater clarity, lifting both UST yields and equites. USD/CAD rose to a high of 1.4426 from 1.4435 after a weak 1.1k rise in February Canadian employment, and threats from Trump to impose reciprocal tariffs immediately, but erased the majority of the rise after Powell’s comments.