Category: Forex News

ForexLive Asia-Pacific FX news wrap: Expectations of a BoJ policy shift tomorrow rise

Weekend:

USD/JPY
traded a little higher early in the session. We had machine order
data from Japan that put a very minor wobble into expectations of a
Bank of Japan tightening in policy tomorrow, along with the
announcement of an unscheduled JGB buying operation to take place on
Tuesday through Thursday. After hitting a high just over 149.30 USD/JPY
subsequently has dribbled back to around 149.00 to be barely changed
on the session. Expectations
of a Bank of Japan pivot away from negative rates and yield curve
control continued to build. In the points above, for example, you’ll
find Nomura calling the BOJ tightening a ‘done deal’ and Goldman
Sachs shifting their expectation for the pivot to tomorrow from
previously forecasting an April move.

Despite
iron ore hitting its lowest level since May 2023, under $100, AUD/USD
gained a few tics higher. Its managed to sustain the small positive
on the session, helped along by data from China today for key
indicators from China; business investment, retail sales, industrial
production and unemployment showing what some are referring to as
continued ‘green shoots’ for the economy. Business
investment, retail sales, and
industrial
production
all
beat expectations. Unemployment, however, rose.

Oil
opened with a small gap to the downside but that has closed. As a
side note, Morgan Stanley raised their Q3 Brent crude forecast to $90
/ barrel, from $80.

In
geopolitics we had another missile test firing from North Korea,
along with prolonged comments from Putin, who won his sham election
for another six year term. In his remarks Putin warned that a
full-scale conflict between Russia and NATO is possible if Western
troops enter the fighting:

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  • ‘Anything
    is possible in today’s world. It is clear to everyone that this would
    be one step from a full-scale world war three’

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