Asia Summary and Highlights 10 Nov
Japan PM Takaichi says not ruling out a sales tax cut
Japan’s Takaichi abandons annual budget target, takes softer fiscal consolidation stance
US Senate has approved the first vote needed to reopen government
China suspends special port fees on US ships for one year
Asia Session
Over the weekend, we heard headlines from Japan on policy tilt. The Japanese PM Takaichi will be abandoning annual budget target in the next fiscal year, a key policy stance since she took office. It opens the path for her to increase spending in the next fiscal year, accompanied by remarks on sales tax changes, such echoes market anticipation of her being tilted towards higher fiscal spending. USD/JPY jumped higher in the open as JPY weakens on the headline to 152.76, 35 pips above Friday's close. The pair is currently trading 0.31% higher at 153.88.
It is reported that US Senate has approved the first vote needed to reopen government in a 60-40 vote. The house is going to vote next and is broadly assumed to be passing too, seeing the reopen of U.S. government in days. We are also hearing more thawing headlines regarding U.S.-China as China suspends special port fees on US ships and export ban on gallium, germanium and other critical metals to U.S.. The broad risk atmosphere is upbeat and see AUD/USD trading 0.49% higher at 0.6525, NZD/USD is trading 0.18% higher at 0.5636 while USD/CAD slides 0.14%. Else, EUR/USD is unchanged and GBP/USD is down 0.08%. Major currency pairs opened with independent gap but were all closed at one point in the session.
North American session
Canada reported much stronger than expected October employment data, with a rise of 66.6k with unemployment falling to 6.9% from 7.1%. USD/CAD fell to 1.4050 from 1.4120, the move extending in late trade as equities erased earlier losses as a Democratic proposal raised hopes that an end to the government shutdown was approaching. AUD/USD, after slipping to .6470, recovered to .6490.
A weak preliminary November Michigan CSI of 50.3 from 53.6 provided some weight on the USD, but the negative from this was largely erased with the late equity recovery. EUR/USD returned to near 1.1560 after rising above 1.1580 while USD/JPY picked up to 153.50 from near 153. EUR/GBP slipped back below .88 while EUR/CHF was steady near .9310.