Asia Summary and Highlights 25 Apr
Japan chief cabinet secretary Hayashi said rapid FX moves undesirable, ready for full response
Asia Session
As USD/JPY broke through 155, the speculated intervention from some market participants did not materialize and sees the rally continues. While extreme weakness in the JPY will lure intervention, one must also keep in mind the pace of such weakness. Rather than a spike, the latest USD/JPY rally began in March and entered consolidation for two weeks before slowly grinding higher. Japan chief cabinet secretary Hayashi joined the club with verbal intervention by saying rapid FX moves undesirable and is ready for full response. It is a rhetoric that we could read as intervention could be close but "rapid move" may have different interpretation. Both the U.S. Treasury and JGB Yields are higher across the curve and see USD/JPY marching 0.24% higher at 155.7.
While U.S. major equity indexes fell on mixed earnings report, regional sentiment is positive in China and Hong Kong, but no Japan. And the AUD/USD is taking cues from that, along with strong iron ore prices. AUD/USD is 0.16% higher at 0.6508, NZD/USD up 0.11% at 0.5942 while USD/CAD slipped 0.09% to 1.3690 with oil up ten cents. Else, EUR/USD is up 0.1% and GBP/USD up 0.04%.
North American session
USD/JPY spiked above 155 early in North America and while initially struggling to sustain the break accelerated in the afternoon to reach a high of 155.37 before settling around 155.25. The move saw no obvious trigger. US durable goods orders with a rise of 2.6%, 0.2% ex transport were close to consensus.
EUR/USD had little direction near 1.07 though ended slightly firmer. EUR/USD slightly underperformed GBP/USD which advanced to 1.2465. AUD/USD slippage stabilized near pre-CPI levels around .65. USD/CAD moved above 1.37 on a 0.1% decline in Canadian retail sales before returning to the figure. BoC minutes from April 10 showed differing opinions on when the BoC should start easing, and had little market impact.