Asia Summary and Highlights 25 March
BoJ Minutes suggest Most members agreed the likelihood of hitting 2% target had been rising
Asia Session
In the January BoJ minutes, most members expressed the recognition that the likelihood of realizing the outlook had been rising. The January meeting saw the BoJ hike by 25bps and since there has been little change to forward guidance. It is very likely BoJ will wait for the result of wage negotiation before any new guidance. USD/JPY is trading 0.03% lower at 150.65 as U.S. Treasury underperform JGB Yields.
Chinese local news reports that China is considering multi billion services subsidies. It seems to be another attempt from China to support domestic economy. But without further details, market participants are numb to the headline and is seeing limited impact towards the regional equity sentiment. AUD/USD is up 0.05% to 0.6289, NZD/USD is down 0.09% to 0.5723 while USD/CAD is unchanged/ Else, EUR/USD is up 0.06% and GBP/USD is up 0.03%.
North American session
Reports that Trump’s April 2 tariff announcement would be less broad based than feared triggered a rally in equities, that was further fuelled by a rise in the S and P services PMI to 54.3 from 51.0, though manufacturing fell to 49.8 from 52.7. Late in the session Trump appeared to confirm the earlier reports by stating a lot of countries may get breaks on tariffs, though he added that he would announce additional tariffs on autos, lumber and chips, and that not all tariffs would be included on April 2.
With UST yields rising, the USD rallied, USD/JPY up a big figure to trade above 150.50. EUR/USD edged off its lows on Trump’s comments but still ended near 1.08, down from 1.0850. EUR slipped versus GBP and CHF, with GBP/USD finding support around 1.29. AUD/USD and USD/CAD were little changed.