The
US dollar lost further ground during Asian trade as I post. All major
FX posted gains against the big dollar. The People’s Bank of China
wil be happy with the weaker dollar, the Bank has been defending the
yuan and it rallied further today. While on China, data from there
showed Chinese
industrial companies’ profit fell 16.8% y/y in H1 of 2023, compared
with an 18.8%
fall
in January
–
May.
NZD,
AUD, EUR, GBP, CAD and CHF all added points against the US dollar. As
for USD/JPY it was a mover also, falling to lows under 139.50. Its
just above there as I post. USD/JPY implied volatility drive strongly
higher also, jumping to highs not seen since 9 March. The Bank of
Japan is meeting today and tomorrow and the jump in volatility may be
indicative of market perception that some sort of change or tweak is
coming from the Bank. I should caveat this by saying volatility has
jumped in the days and hours ahead of meetings this year. The, at the
time, Governor of the Bank of Japan Kuroda’s December yield curve
tolerance band ‘tweak’ surprise has driven complacency from BOJ
meeting expectations. Nevertheless the surge today is bigger than
usual.
Asian
equity markets:
-
Japan’s Nikkei 225 +0.2%
-
China’s Shanghai Composite +0.5%
-
Hong Kong’s Hang Seng +1.6%
-
South Korea’s KOSPI +0.7%
-
Australia’s S&P/ASX 200 +0.8%