Asia Summary and Highlights 5 Sep

Asia Session

The July Japan labor cash earning surprised to the upside of 4.1% y/y, along with stronger household spending, above 1% both m/m and y/y. It will be supportive for the BoJ's next hike as firms seems to be shaking off the fear of tariff uncertainty and regain the traction in wage hikes.  USD/JPY is trading 0.2% lower at 148.19 as JGB underperform U.S. Treasury in yields.

The broad risk mood is positive as we see major equity indexes in the green. Market participants seems to be optimistic about the U.S. jobs later in the U.S. session, so as the mood with Trump and his tariff policy. AUD/USD is trading 0.14% higher at 0.6527, NZD/USD is trading 0.21% higher at 0.5859 while USD/CAD slips 0.06%. Else, EUR/USD is up 0.14% and GBP/USD is up 0.09%.

North American session 

The USD made modest gains in a subdued North American session. ADP employment data was weaker than expected with a rise of 54k in August, and the USD slipped, USD/JPY getting close to 148. However, the dip was quickly reversed, despite the next round of data failing to impress. Initial claims rose to a higher than expected 237k from 229k, and a July trade deficit of $78.3bn, up from, $59.1bn in June was in line with expectations. Q2 non-farm productivity was revised up to a stronger than expected 3.3% from 2.4%. 

August’s ISM services index was stronger than expected at 52.0 from 51.5 which helped extend USD gains, USD/JPY moving above 148.50, though the gains faded in late trade. USD/CHF was also slightly firmer but EUR/USD was little changed near 1.1650. GBP, AUD and CAD also ended little changed versus the USD.