ForexLive Asia Wrap: Japanese holiday doesn’t halt the Yen weakness

Author: Eamonn Sheridan | Category: News

Author: Eamonn Sheridan

  • Weekend Japan developments were centred on news that the BOJ was to accept the government’s 2% inflation target and to issue a joint statement to be finalized at the Jan 21 & 22 BOJ meeting; its not a binding accprd; there is no deadline for achieving the 2% target
  • New Zealand December Debit Credit Card Retail Spending +0.3%MoM (vs. +0.5% for November)
  • NZ December Debit Credit Card Total Spending +0.4% MoM (vs. +0.7% for November)
  • December Australia TD/MI Inflation Gauge +0.4%MoM (vs. -0.1% in November)
  • December ANZ Job Advertisements -3.8% MoM (vs. -2.9% for November), the ninth consecutive monthly decline
  • November Australia Housing Finance Loans came in at -0.5% (Market expected +0.5%)
  • The head of the Chicago Fed, Charles Evans, spoke in Hong Kong saying, notably: “need several months of 200k+ job growth to end QE3” and he “Expects low rates until 2015”
  • Le Figaro: France To Limit Cut In Livret A Yield To 1.75%
  • Financial Times: EU redrafts plan for bank rescue funding – calling into question the commitment to break the bank/sovereign nexus
  • Reports in the Australian Press that an Australian budget surplus this year is still a possibility because of the rise in the iron ore price

It was a holiday in Japan today, with markets less liquid than normal. That didn’t stop the Yen weakness, though – USD/JPY blasted through 89.50 in the morning. Getting as high as 89.67. It pulled back to 89.40 and then crawled back towards its highs for the balance of the session.

EUR/USD had a quiet start, but rallied as buyers seemingly reasoned that Bernanke’s speech due on Monday evening (Eastern Time) would dispel the doubts raised on easing by FOMC minutes released recently. EUR/USD got as high as 1.3404; EUR/JPY got to 120.

AUD/USD fell as low as 1.0522 in the morning but put on a decent rally to 1.0562 as the EUR and GBP/USD moved higher. NZD/USD, too, put on a good rally simultaneously.