Asian Session Recap – Sept. 29, 2014

  • RBNZ foreign currency holdings data confirms currency intervention
  • Nikkei closed with 0.50% gain for the day
  • BOJ Gov Kuroda: Japan to continue moderate recovery
  • Japan PM Abe: Effect of sales tax hike must be closely watched
  • German and Spanish preliminary CPI due

And the cat’s out of the bag! The latest RBNZ foreign currency holdings report indicated that the central bank sold 527 million NZD in August, confirming that Governor Wheeler and his men actually intervened in the forex market. This followed comments from Prime Minister John Key, saying that the ideal level for NZD/USD is at .6500 and that it would be logical for the RBNZ to intervene to bring down the value of the Kiwi.

With that, NZD/USD sold off to a low of .7709 after starting the forex trading week off at .7862. NZD/JPY has broken below the 85.00 handle after the report was released while GBP/NZD surged to the 2.1000 major psychological mark.

USD/JPY also saw a lot of movement in the past few hours, as the pair broke to new highs at 109.76. GBP/JPY is still stuck around the 177.75 level while EUR/JPY is holding on to 139.00. The Nikkei ended with a 0.50% gain for the day, even as BOJ Governor Kuroda admitted that there has been a slowdown in exports and industrial production. The Japanese central bank head still reiterated that the economy could continue its moderate recovery, although Prime Minister Abe recently warned that the effects of the sales tax hike must be closely monitored.

The forex calendar is hinting at a light London trading session, with only a few medium-tier reports due. Germany and Spain will print their preliminary CPI readings and set the stage for the release of the euro zone flash CPI estimates later on. In the U.K., mortgage approvals and net lending to individuals reports are due.

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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