Asia Summary and Highlights 22 Mar

Asia Session

USD/JPY stay at recent high after a volatile post FOMC session. U.S. Treasury Yields slip while JGB yields are higher. We got more remarks from Ueda but it is only about general action after exiting ultra-loose monetary policy. Suzuki also did his rounds of jawbone intervention and see USD/JPY retreated from session high. National y/y CPI see a rebound in February after inching closer to 2% in January. Less fresh food y/y CPI also rebounded to 2.8% from 2% while less fresh food and energy continues to moderate to 3.2% from 3.5%. We forecast all three categories to resume easing in the coming months. USD/JPY is trading 0.05% lower at 151.52 after challenging Oct 2022 high circa 151.94.

USD is trading broadly stronger on Friday's Asia session. Regional sentiment in China and Hong Kong tanks with HSI down more than 3%. On/offshore yuan are also seeing a sell off despite "national Team" stepping in. The antipodeans are bearing the brunt with AUD/USD down 0.7% to 0.6524 and NZD/USD down 0.54% to 0.6011, while USD/CAD rose 0.25% as oil slips further in Asia. Else, EUR/USD is down 0.26% and GBP/USD is down 0.13%.

North American session

The USD advanced broadly in North America, with the strongest move coming against the GBP. The BoE left rates as expected but the two hawkish dissenters from the previous meeting this time backed the 8-1 majority, with the only dissent being a dovish one. Also noted was an implicit easing bias contained in the statement 'the Committee will keep under review for how long Bank Rate should be maintained at its current level'. EUR/GBP advanced to .8580 while GBP/USD fell almost a big figure to near 1.2650. EUR/CHF stabilized at higher levels around .9760.

US data was generally on the firm side, with initial claims still low at 210k, a second straight positive Philly Fed manufacturing survey, a narrower current account deficit and later a sharp 9.5% rise in existing home sales. S and P PMIs were mixed with manufacturing stronger but services slower. EUR/USD fell 50 pips to 1.0960 and USD/JPY rose 60 pips to 151.70. AUD and CAD also saw moderate losses despite a brief CAD uptick after Deputy Governor Gravelle said the BoC would persist with quantitate tightening.