The forex trading headlines for Asia trading today, Monday June 03
Economic data points today:
- Japan Monetary Base y/y for May: 31.6% (vs. +23.1% prior)
- Japan April Labor Cash Earnings +0.3% y/y (vs. -0.9% prior) – this will be welcome news for the government as they seek to spur inflation and wage rises
- Australia Q1 Current Account -8.5Bn (vs. -9B expected)
- New Zealand: Government net debt at April 30 is 28.7% of GDP, vs 28.9% forecast
- New Zealand Treasury: Drought to reduce GDP by 0.7% in 2013
- UK data: BRC sales for May: +1.8% y/y (vs. +1.3% expected)
Other:
- Japan’s economy minister Amari said he wouldn’t comment on the government’s pension fund’s allocation (also more from Amari here and here)
- Japan’s finance minister Aso said it is not easy to achieve 2% inflation
- Japan’s chief cabinet secretary Suga said that it is natural for yen to move up and down. I said ‘long may it continue’.
- India’s finance minister Chidambaram said “More steps will have to be taken to reduce gold imports”
- Australia: Westpac says lower Australian dollar and higher yields is spurring foreign buying of $A debt and that they saw Japanese buying of $A bonds in May, the most since August 2012
- GE Capital says that the US Financial Stability Oversight Council has proposed designating it for stricter oversight
- New Zealand Finance Minister English said that the stronger NZ economy is helping the government’s books, and it remains on track for a surplus in 2015/15
AUD, NZD and JPY the most active again today as EUR, GBP and CHF all have a bit of a sleep in this timezone.
First to the yen. Its become a cliche that USD/JPY is going to track the Nikkei, and so it was again today. Nikkei futures indicated a lower opening for the cash market session, and so it proved, but a hard rally in the opening minutes took it into the green, and took USD/JPY up toward 99.90. Sellers ahead of 100 in USD/JPY and a reversal lower for the Nikkei took USD/JPY off 6o points very quickly. Comments from Amari, Aso and Suga (see bullets, above) didn’t help the Nikkei, nor USD/JPY at all. It should be noted that there was positive news for ‘Abenomics’ today with April Cash Earnings coming in improved (see bullets, above). The Nikkie goes into early Europe near its day’s highs, with USD/JPY not far behind.
AUD and NZD partially retraced their big overnight gains, with the kiwi down 50 points from its overnihgt highs and the aussie losing more than 80. Apart from the scheduled economic data points (see bullets) there was no fresh news driving the losses. We await now the RBA decision and accompanying statement at 0430GMT, no rate change is the widely-expected outcome (me included).
