Asian Session Forex Recap – Apr. 30, 2015

  • RBNZ kept interest rates on hold, reiterated dovish bias
  • BOJ policymakers voted 8-1 to keep monetary policy unchanged
  • Japanese preliminary industrial production down 0.3% vs. estimated 3.4% drop
  • Australian import prices fell by 0.2% in Q1 instead of showing a 1.1% increase
  • Australia’s private sector credit up by 0.5% in March as expected
  • Euro zone CPI estimates, German retail sales and jobs data due

Central banks hogged the forex spotlight in today’s Asian trading session, as the RBNZ and the BOJ announced their policy statements. While the RBNZ decided to keep rates on hold at 3.50% as expected, Governor Graeme Wheeler reiterated that they are still ready to cut interest rates later on if economic demand weakens.

The Kiwi had its wings clipped after the announcement, with NZD/USD trading 61 pips lower (-0.81%) near the .7600 handle and NZD/JPY suffering a 106-pip drop (-1.17%) to 90.28. The New Zealand dollar also retreated against its European counterparts, pushing EUR/NZD up to the 1.4600 handle (+0.75%) and GBP/NZD closer to 2.0300 (+0.87%).

The BOJ rate statement was also greeted with a lot of fanfare, even though Governor Kuroda and his men didn’t really make any changes to their monetary policy. The decision was reached with a vote of 8-1, as BOJ official Kiuchi voted against keeping policy steady and suggested that they taper their bond purchases to just 45 trillion JPY. Prior to this, Japan released a better-than-expected preliminary industrial production report for April, indicating a smaller than expected 0.3% dip instead of the projected 3.4% slide.

USD/JPY broke below support at the 119.00 handle and is trading 43 pips lower (-0.37%) as of this writing. EUR/JPY is facing a 73-pip loss (-0.55%) and GBP/JPY is lower by 84 pips (-0.45%).

In Australia, import prices logged in a worse-than-expected 0.2% drop for Q1 instead of showing the estimated 1.1% climb. However, private sector credit chalked up a 0.5% gain as expected for March, allowing the Aussie to stay afloat.

Forex traders could turn their attention to euro zone reports in the next few hours, with Germany gearing up to print its latest retail sales and jobs data. Consumer spending is slated to pick up by 0.5% in euro zone’s top economy while the unemployment change report might show a 14K drop in joblessness. Also lined up for today’s London trading session are the euro zone’s CPI estimates for the current month, and improving inflation figures might allow the shared currency to rally.

U.S. Session Recap

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