The forex trading headlines for Asia trading today, Tuesday June 11
- The big event today was the announcement from the BOJ meeting. The result can be summarised as ‘no change’ – but the market had been somewhat expecting an extension of loan maturities to 2 years from the current 1. But, they didn’t get it.
Earlier Japanese data:
- Japan Money Stock M3 for May: +2.8% y/y (vs. 2.8% expected)
- Japan Money Stock M2 for May: +3.4% y/y (vs. 3.5% expected)
- Japan BSI Business Condition Large Co. (Manufacturing) for Q2: 5.0 q/q (vs. -4.6 prior)
- Japan BSI Business Condition Large Co. (All Industry) for Q2: 5.9 (vs. 1.0 prior)
Other data today:
- Australian home loan for April was below expectation: +0.8% m/m (vs. +2.0% expected)
- National Australia Bank Business Conditions for May: -4 (vs. -6 prior)
- National Australia Bank Business Confidence for May: -1 (vs. -2 prior) (More details here)
- UK data: RICS House Price Balance for May: 5% (vs. 3% expected) (and more here)
- New Zealand: May ANZ Truckometer Heavy traffic index +4.7% (prior was +3.8%)
- New Zealand Manpower survey for Q3: 21% (prior was 23%)
- Australia Q3 Manpower Survey: 5% (vs. 8% prior)
- Japan Manpower Survey for Q3: 15.0 (vs. 11.0 prior)
- China Manpower Survey for Q3: 12% (vs. 18% prior)
Comments/news:
- Japan’s finance minister Aso said the country must speed up tax reform debate
- Japan’s economy minister Amari: Hopes the Bank of Japan communicates appropriately with markets (and more from Amari at the link and also here)
- Former Vice Minister of Finance for International Affairs at Japan’s Ministry of Finance Sakakibara said the third arrow was ‘quite disappointing’ and that 2% inflation in Japan is a ‘dream’
- New Zealand government: Forecasts unemployment to fall
- The Bank of Spain governor Linde said in an interview that it was important to sell nationalized banks ‘well, not badly’. And more at the link, and here.
- Goldman Sachs slashed its 2014 growth forecast for Australia and called for a 20pc chance of recession
And a heads up; the BOJ’s Kuroda has a press conference at 0630GMT; comments embargoed until after 0715GMT
A relatively quiet day ahead of the BOJ announcement. EUR and GBP did nothing up until then, but both moved higher in the aftermath of the BOJ. EUR/USD testing its highs ahead of 1.3300
USD/JPY had a few mild swings ahead of the announcement, finding support around 98.60 and resistance ahead of 99.00. The announcement surprised those in the market who expected the BOJ to announce an extension of loan maturities to 2 years from the current 1 year, a measure that its thought would have calmed volatility in the JGB market somewhat. No such announcement was forthcoming, though, basically the BOJ did nothing new of significance at all. USD/JPY got smashed hard, from around 98.85 to 98.20 and then to 97.75. It didn’t continue lower though, bouncing to 98.40 and settling as i write this. Nikkei and JGB futures were both sold as well.
AUD and NZD were sold off in the Auckland/Sydney mornings, with all sorts of negativity coming from the overnight session; from lower forecasts for iron ore, to Goldman’s lowering its forecast for the AUD, along with continued speculation of political ructions. The release of the poor housing loan data overshadowed the marginally better NAB Business Outlook Surveys, AUD/USD dipped below 0.9400 (0.9381 the low) but a short market provided bids and it ticked higher. It jumped on the BOJ announcement.
