Asian Session Forex Recap – Sept. 9, 2015

  • BOJ official: Important to maintain accommodative environment
  • Japanese consumer confidence index up from 40.3 to 41.7 in Aug
  • Japan’s preliminary machine tool orders down by 16.5% y/y in Aug
  • Australia’s Westpac consumer sentiment slumped by 5.6%
  • Australian home loans up by 0.3% vs. 0.8% forecast, 4.8% previous
  • U.K. manufacturing production data and trade balance due

Is the BOJ still open to further easing? The Japanese yen sold off heavily against its forex peers when BOJ policymaker Sayuri Shirai remarked that it’s important to maintain an accommodative monetary environment. Keep in mind that forex traders have been on the lookout for potential easing clues, especially after the ECB shared a dovish bias in their recent statement.

Yen pairs surged upon hearing Shirai’s testimony, with USD/JPY up 56 pips to 120.37 (+0.47%), EUR/JPY up by 32 pips to 134.51 (+0.24%), GBP/JPY up by 87 pips to 185.30 (+0.46%), and AUD/JPY up by 89 pips and approaching the 85.00 handle (+1.07%). Not even the improvement in the Japanese consumer confidence index from 40.3 to 41.7 in August was able to prop the yen up, as the preliminary machine tool orders report printed a whopping 16.5% year-over-year drop for the same month.

In Australia, data was mostly weaker than expected, as the Westpac consumer sentiment report showed a 5.6% decline in confidence for September, possibly due to the negative vibes from the Chinese stock market selloff last month. Home loans printed a 0.3% uptick, lower than the projected 0.8% gain and the previous 4.8% jump.

Up ahead, pound pairs could enjoy additional volatility, thanks to the release of the U.K. manufacturing production report and the trade balance at 9:30 am GMT. Manufacturing production is expected to have picked up by another 0.2% in July while the trade deficit is projected to have widened from 9.2 billion GBP to 9.5 billion GBP in the same month. Stronger than expected data could allow the pound to hold on to its recent forex gains while weak results could let the selloff resume.

U.S. Session Recap

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