Asian Session Forex Recap – Nov. 22, 2016

  • Earthquakes hit Northern Japan and New Zealand
  • Japanese government lifts tsunami advisories

Forex traders were deep in Chopsville during the Asian session, as a lack of economic releases prompted traders to track the previous session’s economic themes.

Major Events:

Earthquake in Japan AND New Zealand– At around 6:00 am local time (21:00 GMT), a 7.4 magnitude earthquake was felt off the coast of the Fukushima prefecture. Recall that the same region saw a massive earthquake in March 2011, which resulted to spills from nuclear power plants and even a coordinated currency intervention from major central banks.

Fortunately, analysts say that the faults moved laterally (as opposed to vertically) and didn’t inspire much threats of tsunamis. In fact, the government just lifted all tsunami warnings not an hour ago and shared confidence that there’s “minimal” damage to the nuclear power plants. The yen strengthened a bit at the news, but the lack of reaction from Japanese manufacturers eventually restored investor sentiment.

New Zealand was also hit by another powerful earthquake, this time hitting the North Island and centered around 200 kilometers north-east of Wellington and has a depth of 10 kilometers. The Pacific Tsunami Warning Centre has not issue a tsunami warning. Luckily, the New Zealand dollar fared pretty well and maintained its gains against its major counterparts.

BOJ Kuroda speech – Bank of Japan (BOJ) Governor Kuroda delivered his semi-annual report before the Diet today. In his speech, he expressed his confidence that the bank’s 2.0% inflation target will be met in FY 2018. He was also optimistic over their current policies. Not only does he believe that their current program is more sustainable, but he also remarked that “conditions have clearly improved” since the central bank launched its QQE program.

Kuroda hasn’t talked about the yen’s current levels, however, only saying that USD/JPY’s current rate is not much different from its levels at the start of the year.

Major Market Movers:

Comdolls – A bout of risk-taking pushed the commodity-related currencies higher against the Greenback.

AUD/USD is up by 39 pips (+0.53%) to .7396, USD/CAD slipped by 21 pips (-0.16%) to 1.3405, and NZD/USD shot up by 33 pips (+0.47%) to .7080.

JPY – The yen started the day on a strong note after a strong earthquake in the Fukushima prefecture inspired a bit of risk aversion that sent traders into the arms of the low-yielding yen. The currency eventually recovered and is nearly back to its previous lows against its counterparts.

USD/JPY went down to 110.27 before pushing up to 110.71 while GBP/JPY slipped to 137.91 before climbing back up to 138.28. EUR/JPY also hit a low of 117.39 before recovering to 117.69, and AUD/JPY slipped to 81.45 before jumping back up to 81.90.

Watch Out For:

  • 8:00 am GMT: Swiss trade balance (3.89B CHF expected, 4.37B CHF previous)
  • 8:45 am GMT: RBA Assistant Governor Kent to speak in Sydney
  • 10:30 am GMT: U.K. public sector net borrowing (5.9B GBP expected, 10.1B previous)
  • 12:00 pm GMT: U.K. CBI industrial order expectations (-8 expected, -17 previous)

See also:

U.S. Session Recap
London Session Recap

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