- UBS lowered its forecast for China’s 2023 economic growth to 5.2%, from 5.7% previously
- BOJ announces no change to JGB Yield Curve Control tolerance band, as widely expected
- Westpac forecasts the RBA terminal rate to 4.6% in August
- China's State Planner says it'll speed up implementation of key projects
- China's third batch of 2023 crude oil import quotas issued, taking volumes to up 20% y/y
- Summers: Federal Open Market Committee (FOMC) driven by internal politics - 'disturbing'
- PBOC sets USD/ CNY reference rate for today at 7.1289 (vs. estimate at 7.1282)
- Japan finance minister Suzuki says he has no comment on FX levels
- Singapore's May non-oil exports fall 14.7% y/y, much worse than the -8.1% expected
- Deutsche Bank expect an ECB terminal rate of 3.75%, but risks remain clearly to the upside
- Bank of Japan policy decision due today - preview: No change expected but July is live
- Yield curve inversion signals Australia heading towards recession, but RBA to hike further
- New Zealand Manufacturing PMI (May) still in contraction at 48.9 (prior 48.8)
- JP Morgan expects real money rebalance equities selling of up to US$150bn in coming weeks
- US stockmarket triple witching day on Friday, 16 June 2023 preview - chaos into the close
- Fed's Bostic made more transactions during an FOMC blackout period
- Forexlive Americas FX news wrap 15 Jun:ECB raises rates by 25 basis points. Hints of more.
- Morgan Stanley on the Federal Reserve - stick a fork in it
- Trade ideas thread - Friday, 16 June 2023
- No fear of the Fed: Stocks put up big gains
It was a rangebound day for major FX in Asia here ahead of the BOJ statement. More on the BOJ in a moment.
Otherwise there was no data of impact, and news flow was extremely light. We had small dribbles from China on boosts to the economy. The next round of monetary stimulus should come on Tuesday the 20th when there is expected to be a cut to Loan Prime Rates.
And so to the Bank of Japan. The Bank announced no change at all to its main policy planks:
- maintained short-term interest rate target at -0.1%
- maintained its 10-year JGB yield target around 0%
- maintained its band around the 10-year JGB yield target at + / - 50bp
The Bank repeated, again, that it expects the pace of inflation to slow from the middle of this Fiscal Year. This would be around September/October (Japan's Fiscal Year begins on April 1). BOJ policymakers want to wait for signs of more sustainable, stable inflation before making a move to dial back easy policy.
The BOJ policy committee said it made its decision on YCC by unanimous vote. The ‘no change’ decision was widely expected, although after former Governor Kuroda widened the band around the 10-year JGB yield target back in December last year, after repeated assurance he would do no such thing, the risk of some surprise from a BOJ meeting has risen.
Market response was a pop higher for yen crosses and Nikkei 225 futures.
Asian equity markets:
Japan’s Nikkei 225 -0.5%
China’s Shanghai Composite +0.3%
Hong Kong’s Hang Seng +0.6%
South Korea’s KOSPI +0.3%
Australia’s S&P/ASX 200 +0.6%
USD/JPY has pretty much given back its post-BOJ pop:
