It
was a day of strength again for the US dollar, with yen a notable
loser. As I post USD/JPY has hit a high just short of 152.00 and to
its highest since 1990.
We
had comments from Bank of Japan policy board member Tamura, who
signalled he is in favour of continued, albeit slow and careful,
tightening of policy. Financial media describe Tamura as a hawk.
Which is laughable. At the Bank of Japan there are doves and slightly
less dovish doves. Tamura is in the ‘slightly less’ camp. We also
had comments from Bank of Japan Governor Ueda, who was speaking
from parliament. Neither of these two had anything to say on the weak
yen. Nothing at all. And, we didn’t hear from Kanda or Suzuki today
with verbal intervention. BTD in yen crosses remains the play.
ADDED
… Prior to posting this we have had a comment from Japan’s
finance minister Suzuki in which he said he
- won’t
rule out any steps including “decisive steps” to respond to
disorderly FX moves
This
is a ramping higher of rhetoric (but, yes, its still just words) from
Suzuki and its given yen crosses a shake lower.
–
From
Australia today were monthly CPI data for February. The headline came
in slightly under expectations
but at 3.4% y/y still well above the top of the Reserve Bank of
Australia target band (which is 2 to 3%). Underlying rates of
inflation were higher than this.
On
the other hand, two
things:
- the
recent annualised rates (2.2%
in the last 6 months, for example) are improving notably - while
the monthly
trimmed mean inflation rate ticked
up to 3.9%
y/y,
this was due to a base effect; trimmed mean m/m
was a small negative
These are
encouraging data.
AUD/USD
fell away a few points on the data. Other FX also weakened against
the USD; NZD, EUR, GBP, CAD but it was AUD hit more so out of this
lot.
From
New Zealand was the government’s
Budget Policy Statement. GDP
forecasts were revised down. The combination in NZ of discretionary
fiscal policy changes (tax
cuts) and
a weaker economic outlook means NZDM’s bond issuance guidance is
likely to increase.
From
China, data showed industrial profits reached a 25-month high of
10.2% y/y YTD in the first two months of 2024.