Asian Session Recap – May 12, 2014

  • Nikkei posts 0.35% decline for the day
  • PBOC: No need to implement large scale stimulus
  • Russia tension escalates, Germany and France ready to impose more sanctions
  • Japan’s Economy Watchers sentiment index down from 57.9 to 41.6
  • Swiss retail sales to show 1.9% annual increase

Major currency pairs bounced off their Friday lows in today’s Asian trading session, with EUR/USD climbing back above the 1.3750 level and AUD/USD holding steady above .9350. USD/JPY jumped to a high of 102.03 before retreating, as the Nikkei posted a 0.35% loss for the day.

Japan’s Economy Watchers sentiment index declined from 57.9 to 41.6 in April, weaker than the estimated 45.2 reading. This also marks the first time that the index slipped below 50.0 since February 2013, just a few months before the BOJ decided to unveil its massive QE program.

Meanwhile, PBOC Governor Zhou Xiaochuan was quoted saying that the Chinese central bank doesn’t need to implement any large scale stimulus efforts to spur economic activity. However, he hinted that the PBOC might be looking to fine tune its current monetary policy in response to the latest slowdown.

Risk appetite remains weak this Monday, as the escalating tension in Russia has prompted France and Germany to warn about imposing further sanctions on the country. German Chancellor Angela Merkel has specified that they are ready to draw the appropriate consequences if Ukraine’s presidential election in May 25 does not push through.

Data is light in the upcoming trading session, with only the Swiss retail sales report on tap. A 1.9% gain in consumer spending year-over-year is eyed, stronger than the previous 1.0% increase.

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U.S. Session Recap

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