Asia Summary and Highlights 4 April
BOJ deputy governor Uchida says will raise rates if inflation rises and economy improves
Japan February household spending -0.5% y/y
Major equity indexes stay in the red
Asia Session
USD/JPY took a breather after the slide on Thursday in the early Asia session to a session high of 146.4 but reverted to previous momentum as session progress. Despite both the U.S. Treasury and JGB yields are trading lower, JGB yields are fast approaching 1%. BoJ's Ueda and Uchida have their comment towards the latest development and neither is optimistic, along with "better" than expected February household spending (still contracting by 0.5% y/y). USD/JPY is trading 0.4% lower at 145.44.
Major equity indexes remain in the red as market participants digest the impact of U.S. "universal" tariff. Trump has signaled his willingness to negotiate in the Asia session, naming China and the potential Tik Tok sale for now. USD is trading broadly stronger except against the Euro, Sterling and JPY. AUD/USD is down 1.39% to 0.624, NZD/USD down 1.23% to 0.5723 while USD/CAD is close to unchanged. Else, EUR/USD continues to rise by 0.42$ and GBP/USD is up 0.04%.
North American session
USD weakness persisted in the morning before seeing an afternoon correction. Equities plunged early and remained sharply weaker. USD/JPY bottomed at 145.20 and moved back above 146. EUR/USD slipped to 1.1020 from above 1.11 and GBP/USD slipped below 1.31 from 1.32. USD/CAD bottomed at 1.4028 and held below 1.41. AUD.USD peaked at .6389 before correcting to .6220.
Initial claims were lower than expected at 219k but had little impact. February’s trade deficit of $122.7bn was near consensus. Later a weaker than expected ISM services index of 50.8 helped sustain the downward momentum the USD had at the time. Fed’s Jefferson and Cook saw no hurry to change policy.