Asia Summary and Highlights 22 Feb

Asia Session

Speaking in front of the parliament, Ueda says that Japan's trend inflation heightening and will make appropriate monetary policy decision. As this is the market consensus, without any concrete action, it is hard to see it will have any lasting impact in the market. And indeed, JPY gained a few pips with JGB yields reversing earlier losses on the comment yet it is marginal. Ueda also mentioned a 1% rise in interest rates will lead to 40 trln yen worth of valuation loss on BOJ’s JGB holdings, which seems to suggest hte pace and magnitude of hikes will be gradual. USD/JPY is trading 0.02% higher with 10yr JGB yields rising and U.S. T-yields dips.

Global risk sentiment is broadly positive after Nvidia earning beat estimate the Chinese government introduce new measures to limit institutional players selling shares. There is limited impact from New Zealand's weak trade balance for January with both the export and import shrunk as the RBNZ and market participants focus revolves around inflation figures. NZD/USD is trading 0.2% higher at 0.6192, AUD/USD is also 0.1% higher at 0.6558 while USD/CAD slips 0.17% to 1.3483. Elsewhere, EUR/USD is up 0.11% and GBP/USD is up 0.03%. 

North American session

In quiet trade ahead of the FOMC minutes the USD advanced versus the JPY, to 150.30, and the AUD, to .6540, but saw little direction elsewhere in the absence of significant data. UST yields were higher, a weak 20 year auction extending the move at the long end.

FOMC minutes showed most noting the risks of easing too quickly, but there was little that was clearly hawkish. Markets showed little reaction, though the USD saw a marginal softening after the release, with EUR/USD reaching a high of 1.0824.