Asian Session Forex Recap – May 9, 2016

  • Japanese average cash earnings up 1.4% vs. 0.6% estimate
  • Australian ANZ job advertisements down 0.8% in April
  • Japanese Finance Minister: Sudden JPY appreciation could prompt intervention
  • BOJ minutes: Economy continued to recover gradually

Yen pairs barely flinched from yet another set of intervention threats from the Japanese Finance Minister as traders focused on positive wage figures and the BOJ minutes.

Major Events:

BOJ meeting minutes – Remember when the Japanese central bank refrained from easing monetary policy in their latest decision? Well, it looks like policymakers aren’t so pessimistic about Japan’s prospects, maintaining that the economy continues to recover gradually.

The transcript of their meeting included a discussion on weaker consumer sentiment and spending, possibly leading to even more downside pressure on inflation. For now, committee members agreed to carry on with their current pace of easing until the 2% inflation target is achieved but added that additional stimulus can be doled out if needed.

Japanese Finance Minister Aso jawbones… again! – Japanese government officials are still bothered by the yen’s recent rallies, prompting Finance Minister Taro Aso to jawbone once more. The Finance Minister reiterated that a sharp yen appreciation could force them to intervene in the forex arena, but traders still seem to think that he can’t walk the talk.

Market reaction to Chinese trade balance – Most Asian investors don’t seem to be too impressed by the stronger than expected Chinese trade surplus printed over the weekend, as the underlying components revealed a 10.9% year-over-year slump in the dollar value of imports. This reflects a sharp drop in domestic demand, which means that the world’s second largest economy isn’t in the mood to buy up raw materials and commodities from its trade partners like Australia.

The Chinese yuan edged lower while the China A50 index is down 1.02% to 9,352.46 and Australia’s S&P ASX 200 index dropped 0.14% to 5,285.20.

Major Currency Movers:

JPY – Yen pairs are slightly higher following the release of the BOJ minutes and Finance Minister Aso’s intervention talk.

USD/JPY is up 47 pips to 107.58 (+0.45%), EUR/JPY rallied 55 pips to 122.65 (+0.47%), and GBP/JPY is up 74 pips to 155.20 (+0.44%). AUD/JPY climbed past the 79.00 handle to a high of 79.33 and NZD/JPY is testing the resistance at the 73.50 mark.

Watch Out For:

  • 7:00 am GMT: German factory orders (0.7% expected, -1.2% previous)
  • 8:15 am GMT: Swiss CPI (0.2% expected, 0.3% previous)
  • 8:30 am GMT: U.K. Halifax HPI
  • 9:30 am GMT: Euro zone Sentix investor confidence (6.1 expected, 5.7 previous)

See more:

U.S. Session Forex Recap

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