Asia Summary and Highlights 12 March

Asia Session

Apart from the trade fiasco with U.S., the focus for Japan will likely be on the spring wage negotiation. The early discussion seems to be brewing for strong result with Labor union group Rengo asking for a 6.09% wage increase and large firms like Denso seems to have accepted the suggestion. USD/JPY is trading 0.26% higher as USD is broadly higher on Wednesday's Asia session with U.S. Treasury Yields opening lower and JGB yields moderating the opening gains. 

The broad sentiment seems to be calmer on Wednesday despite Trump's steel and aluminum tariffs go into effect. The market seems to be content with Trump not going over 25% for now and see U.S. major equity indexes taking a breather after a week of bloodbath. AUD/USD is down 0.16% to 0.6288, NZD/USD is also down 0.23% to 0.5703 while USD/CAD rose 0.11%. Canada has warned of oil export restrictions to the U.S. after Trump threatened of raising tariffs to 50% on aluminum and steel. Else, EUR/USD is down 0.19% and GBP/USD is down 0.21%.

North American session

A Trump announcement that steel and aluminum tariffs on Canada would be doubled to 50% in response to Ontario’s’ 25% surcharge on electricity exports to the US sent USD/CAD surging above 1.45 from 1.4415, and sent equities lower, but was reversed when Ontario Premier Ford agreed to suspend the surcharge after a conversation with US Commerce Secretary Lutnick. USD/CAD fell back to 1.44 while equities recovered, supported also by Ukraine agreeing to a 30-day ceasefire in return for renewed US aid, though Russia’s response is still awaited. 

After an early move above 148 USD/JPY fell to near 147 as equities slipped, before recovering to 147.70. AUD/USD was firm, moving above .63. EUR/USD saw limited movement but held firm above 1.09. GBP/USD nudged above 1.2950. US data had little impact. February’s NFIB small business optimism index fell to 100.7 from 102.8 but January job openings were stronger than expected with a rise of 248k.