Asian Session Forex Recap – Sept. 16, 2016

  • Chinese markets still on mid-Autumn Festival holiday

Forex price action was as exciting as watching paint dry, as a lack of catalysts kept traders in the sidelines. Here’s what happened in the last few hours.

Major Events:

Japan’s Aso encourages “Fiscalism” – Japan’s Finance Minister Taro Aso hit the newswires today, suggesting that fiscal policy should also help in stimulating demand. If you think that you’ve heard of the concept before, it’s probably because ECB’s Mario Draghi has also repeatedly called for fiscal policy changes to supplement their monetary stimulus in boosting economic activity.

Regarding monetary policy, Aso left the ball in the Bank of Japan’s (BOJ) court and said that it’s up to the central bank to decide its policy steps. However, he also said that the Ministry of Finance is “closely coordinating” with the BOJ (probably for surprise currency interventions).

Tight trading conditions – There was barely any volatility in the forex markets, as traders continued to digest the not-so-awesome economic releases from Uncle Sam. It also didn’t help that China is still out for a holiday and there were no data releases during the session. There’s a bit of profit-taking in the equities markets though, likely ahead of the big catalysts scheduled next week.

Australia’s ASX is up by 1.08% and Nikkei is up by 0.58%. Oil prices weren’t as lucky though, with Brent crude oil sliding by 0.69% to $46.27 and U.S. oil prices slipping by 0.68% to $43.61.

Major Market Movers:

JPY – Yen crosses started the session on the red side of the charts before a bit of profit-taking pushed them back up.

USD/JPY temporarily dipped to 101.76 before finishing at 101.99 (-0.19%), EUR/JPY fell to 114.43 before closing at 114.66 (-0.18%).

AUD – The Aussie shot higher across the board despite the lack of economic catalysts. One possible explanation is the mixed U.S. data from the previous trading session pushing the higher-yielding currency higher against the dollar.

AUD/USD inched 4 pips higher (+0.07%) to .7514 and EUR/AUD is down by 9 pips (-0.06%) to 1.4961.

Watch Out For:

  • 8:00 am GMT: Italian trade balance (3.67B EUR expected, 4.66B EUR previous)

See also:

U.S. Session Recap
London Session Recap

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