Asia Summary and Highlights 20 Feb

The People’s Bank of China cut its 5-year Loan Prime Rate by 25bp
Asia Summary
The People’s Bank of China cut its 5-year Loan Prime Rate by 25bp to 3.95% from 4.20%. It was one of the largest cuts ever seen but its impact for the market seems to be muted as we are seeing regional equity indexes remaining in the red with individual ones up a few pips. The market seems to think the cut is coming too late and has been speculating from more, stronger stimulus from the Chinese government. The RBA minutes do not give us anything new for they continue to keep doors open as long as inflation and domestic demand remain strong. That is the caveat of changes in the wordings of February's forward guidance which can be interpreted as no more hike unless CPI spikes. The AUD/USD did not cheer the PBoC rate cut for Yuan is also giving the cold shoulder. AUD/USD is down 0.14% to 0.6531, NZD/USD lose by a same magnitude to trade at 0.6140 while USD/CAD rose 0.14%.
It is another day USD/JPY stays above 150 on broad USD strength and we have the usual Suzuki's jawbone intervention. U.S. Treasury Yields are performing individually while 10yr JGB yields slip. From now till March's spring wage negotiation, there seems to be limited data that would significantly sway the position of JPY, unless there are "leaks" from BoJ. Thus, USD/JPY seems to be driven by USD flows. USD/JPY is trading 0.14% higher at 150.32 and still looks to be consolidating within 149.24 and 150.89 from last Tuesday's gain. Else, EUR/USD is down 0.07% and GBP/USD is down 0.08%.
North America Summary
North American trading was subdued with the U.S. on holiday. Additionally, a lack of major news, plus also less aggressive rate cuts expectations for 2024, leaves FX traders want to see a clearer trend in data and policy guidance to increase FX volatility.
Some focus remains on the JPY after the softer profile last week and Japanese GDP data showing a technical recession. So far this has pushed the market to think about a June rather than April hike in the key policy rate, but some traders are questioning whether this could cause the BOJ to abandon rate hike plans and led to further JPY weakness.