USD/JPY crawled a little higher again during the Tokyo morning session, hitting 156.90 and its highest since May 1 (when it was slammed lower in anot
USD/JPY
crawled a little higher again during the Tokyo morning session,
hitting 156.90 and its highest since May 1 (when
it was slammed lower in another bout of intervention).
Information flow from Japan today included the preliminary PMIs for
May, showing Manufacturing moving into expansion for the first time
in a year. We also had the Bank of Japan with a Japanese Government Bond
buying operation. Yields on the 10yr traded above 1% this week, so
the BOJ is unlikely to trim back its buying of JGBs again any time soon.
Reserve
Bank of New Zealand Governor Orr spoke again, communicating his
message more widely from the Bank’s Statement and his press
conference on Wednesday. Most notably, Orr said the Bank can begin
easing before inflation falls to 2%. Finance Minister Willis also
spoke, promising fiscal restraint but indicating next year’s
deficit would be larger than this year’s. NZD/USD has gained ground on
the session, back towards 0.6120.
Singapore
announced stronger growth figures, while its central bank, the
Monetary Authority of Singapore, said current policy settings were
appropriate.
China’s
military began military drills surrounding Taiwan, boasting of
weaponry it
could use to eliminate
“Taiwan independence secessionists” and
warning off “interference and provocation by external forces”.
Chinese markets sold off. I’ll leave it to others to debate if the
two are connected but given foreign investor wariness of China’s
politics and economic policies at present its not difficult to see
some connection at least. But of course you can’t count out the hawkish FOMC MInutes and market response on Wednesday leading in either.
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