Forex news for Asia trading Friday 27 January 2017
- Bank of Japan Dec CPI ex food, energy rises 0.1% YoY.
- GBPUSD moves to session lows
- Japan to cut pension payments 0.1% in fiscal 2017
- Trump and Hannity: Some highlights from the interview on Fox
- Extremely quiet except pairs with JPY in the name
- USDMXN rises in Asian trading as tensions increase
- Mexico's Foreign Minister: We will work with the Trump administration
- BOJ announces its JGB-buying plans. Increases bond buying
- Japan's Suga: Japan to prepare for all scenarios on US trade talks
- Abe: Can't say we've emerged from deflation just yet
- Australia Q4 producer price index +0.5% vs +0.3% expected
- Australia export price index +12.4% vs +12.1% q/q expected
- Japan to Trump "Psssst, you know who really has a large trade surplus"
- Nikkei opens 0.26% higher at 19,453
- Japan December CPI: +0.3% y/y vs +0.2% expected
- Trump's import tax talk and backtracking is the kind of thing that undermines confidence
- What's coming up in Asia-Pacific trading: Japan CPI, Aussie PPI
In other markets:
- Nikkei +0.23%
- Shanghai +0.31%
- HK -0.06%
- ASX+0.66%
The BOJ boosted the purchases of bonds due in 5-10 years from 410 billion yen to 450 billion yen. The move led to a fall in the 10 year JGB yield to 0.078%. Yesterday the yield moved to a high of 0.10% before coming back down. That was near the high yields in December. The yield in the benchmark bond has not traded above that level since the end of January 2016. The BOJ seems to be putting a lid on the yield on the benchmark 10 year at the 0.10%
In other news out of Japan, CPI inflation came in at +0.3% YoY (est +0.2%), Ex fresh food at -0.2% (est -0.3%) and ex food and energy at 0.0% (vs -0.1% est).
The move helped to kick all the JPY pairs higher (lower JPY). The USDJPY moved above the 100 bar MA on the 4-hour chart and the 38.2% retracement after stalling at those levels during yesterday's trading session. The 38.2% retracement currently comes in at 114.83 (of move down from the Jan 3 high). The 100 bar MA comes in at 114.73. Those level will now be close support for the pair in the London and NY sessions. The high price for the USDJPY extended up to 115.03.
The USD got stronger against the GBP as well. The pair moved down to test the session low from yesterday's trading at the 1.2555 level. The 100 hour MA at the 1.2541 and 100 day MA at 1.25149 are the next key targets below. The pair moved above the key 100 day MA on Wednesday for the 1st time since Brexit. A move below that MA would disappoint the buyers and should lead to further downside momentum.
The EURUSD continues to keep the 1.0706 level as it's key resistance level above. The low for the week at 1.0657, the 38.2% retracement at 1.06518 and the 100 bar MA on the 4-hour chart at 1.06378 remain hurdles to get to and through. The range for the pair this week is 117 pips, which if stood would be the most narrow trading range for a week since 2014. Do we break lower?
Below is a snapshot of the % changes of the major currencies vs each other.
