Asia Summary and Highlights 15 Oct
Rumor is that the heads of Japan’s main opposition parties are expected to discuss whether they can close policy gaps and pick a candidate of their own for the nation’s premiership
Asia Session
The JPY is gaining strongly on Wednesday as rumors came out to suggest the heads of Japan’s main opposition parties are talking about closing policy gaps and pick a candidate of their own for the nation’s premiership. The breaking of LDP-Komeito coalition further exacerbates the potential of such. While it is far from becoming an imminent reality, it weakens the prospect of LDP's Takaichi to become the next PM and thus strengthens the JPY. USD/JPY is trading 0.49% lower at 151.09 with JGB outperform U.S. Treasury yields.
RBA's assistant governor Hunter says that inflation is likely to be stronger than forecast in Q3. It further eliminates the prospect of an imminent cut from the RBA. The broad risk sentiment is positive with HSI and Nikkei leading. AUD/USD is trading 0.42% higher at 0.6513, NZD/USD is trading 0.09% higher at 0.5720 while USD/CAD slips 0.05%. Else, EUR/USD is up 0.11% and GBP/USD is up 0.2%.
North American session
The USD slipped in North America, most of the move coming before a speech from Fed’s Powell, in which he signaled the Fed may end the balance sheet runoff in coming months but added little on the Fed Funds outlook. Earlier comments from US Trade Rep Greer expressing optimism tensions with China could be overcome had assisted a recovery in equities from a weak start.
EUR/USD moved above 1.16 from around 1.1550. EUR/GBP remained firmer but GBP/USD retraced most of its European losses. USD/JPY slipped to 151.70 from 152.10. An AUD/USD recovery from a .6440 low could not quite reach .65. USD/CAD slipped to 1.4035 from 1.4080.