Forex news for Asia trading Thursday 25 February 2016

Bullard:

Japan

  • Japan's Sharp Corp. agrees to a $6.2 billion rescue deal from Taiwan
  • Recap on BOJ's Kiuchi: Negative rates could destabilize financial system
  • BOJ's Kiuchi: Japan's economy continues to recover moderately

Australia/NZ

  • ANZ on Australian capex today and implications for the RBA
  • Its official - Dick Smith to close its stores (Australia)
  • Let's counter some of the pessimism on Australia (warning, LOLs ahead)
  • Is it too early for a preview of the RBA meeting? Nope.
  • Australian Q4 Capex: +0.8% q/q (expected -3.0%, prior -9.2%
  • NZ finmin English: RBNZ has room to respond in inflation if needed
  • Australia: These charts suggest the housing bubble is out of control
  • Australian Q4 Private Capital Expenditure (Capex) due at 0030GMT
  • NZ data - January net migration: +6130 (prior +5510)
  • WSJ on "the big new threat to oil prices: a glut of gasoline"
  • China's vice fin min: Fiscal policy should play a role globally
  • Fed's Kaplan to downgrade his expected path of rate hikes at March FOMC
  • PBOC sets USD/CNY mid-point today at 6.5318 (& Injects 340bn yuan in OMOs)
  • China press - Cutting RRR could stabilize economic growth
  • China fin min says proposal to devalue yuan is not on G20 agenda
  • G20 meeting in Shanghai coming up - don't expect currency intervention
  • Trade ideas thread for Thursday 25 February 2016

A falling yen during US trading continued on here in Asia. Initial resistance around 112.20 saw a dip under the figure, which didn't last and USD/JPY is back to new session highs as I update. Chatter of exporter offers around 112.50 didn't hold it, and as I sign off the 40-year JGB yield has dipped under 1% for the first time..

We had comments from BOJ board member Kiuchi today. He is a persistent dissenter, not in favour of the enhanced easing and not in favour of negative rates, so its difficult to attribute the yen losses to him today. Nevertheless, links to his comments are in the bullets, above. The Nikkei had a strong day also.

CHF, EUR, GBP and even NZD were all relatively sedate, minor movement. NZ fin min English had some words of advice for the RBNZ again ... saying they had room to lower rates. He has pressured Governor Wheeler in the past to lower rates.

Oil gave back some its overnight gain, but not by much. Gold lost a little earlier but has more than recovered to be back above 1235 at one stage and just below there now.

James Bullard of the St. Louis Fed was on the wires with a speech and added comments (see bullets, above), more or less reiterating his less hawkish stance adopted in his speech last week.

The People's Bank of China injected a huge 340bn yuan into money markets today, which hasn't aided stocks in China too much, the Shanghai Comp is more than 3% lower.

The Australian dollar drifted a little lower from a late NY high around 0.7210, down around 20 points as we headed into the big data release of the session, Q4 capex. The 'headline' result was a surprise positive, but thats about the only positive that was taken out of the data, the outlook for next year's capex intentions is down around AUD40bn on this year's expected investment spending, mining investment continues to plummet (no surprise there) and non-mining investment continues to show a lacklustre pick up. There are plenty of 'buts' in the data (the survey was taken during the global volatility of January and early February, the survey doesn't adequately account for investment in services and so on), but these aside the result was still pretty dismal.

AUD/USD moved a little lower, bottoming out (on the session) after a 35 or so point fall and settling sideways since.

Regional equities:

  • Nikkei +1.73%
  • Shanghai -3.61%
  • HK -1.23%
  • ASX +0.27%