Asia Summary and Highlights 12 September

Asia Session

The Japan August PPI came in at -0.2% m/m, lower than expected at +0.0% and +2.5% y/y, lower than expected +2.8%. It paints a dire picture for the BoJ with input inflation flying below consensus. But that doesn't stop BOJ's Tamura saying he expects a gradual path for interest rate hikes. He highlighted the neutral rate is likely to be 1% at least. USD/JPY initially dipped to 142.22 before rebounding to trade 0.3% higher at 142.77 with both the U.S. Treasury and JGB yields rising.

The Melbourne Institute Survey of Consumer Inflationary Expectations for Australia has come in at +4.4%y/y in September. It is a slight moderation from 4.5% in August but still way above RBA's 3% target. Regional sentiment is mostly positive,  along with U.S. three major equity indexes all in the green. AUD/USD is trading 0.24% higher at 0.6690, NZD/USD also 0.23% higher at 0.6151 while USD/CAD slips 0.03%. Else, EUR/USD is up 0.04% and GBP/USD is up 0.05%.

North American session

The USD bounced on a stronger than expected 0.3% increase in core CPI, though overall CPI was on consensus at 0.2%. The USD sustained its bounce overall, but price action was mixed. USD/JPY bounced to peak above 142.50 from 141.75 before fully reversing its gain, but eventually rebounding to 142.35, these moves in line with those of UST yields. 

EUR/USD slipped from 1.1050 to test 1.10 while GBP/USD slipped from 1.3090 to test 1.30 before both saw partial corrections. EUR advanced against both GBP and CHF. AUD and CAD fully reversed initial losses versus the USD to end slightly firmer as equities more than fully erased their post-data losses and oil advanced.