ForexLive Asia Wrap: USD/JPY Above 94 After G20 weekend
The G20 issued a bland Communique on Saturday not pointing the finger at one country re currency manipulation; in brief it said that if policy is aimed at achieving results in the domestic economy then its OK.
There were plenty of follow-up comments in Japan today, most notably from PM Shinzo Abe. He said he would consider revising the BOJ law guaranteeing central bank independence if the BOJ cannot achieve 2% inflation and that the government nominations for the three vacancies at the BOJ will reflect its determination to beat deflation. Very notably, too, he also mentioned the prospect of buying foreign bonds.
It appears Toshiro Muto is firming as the favourite for appointment as the new head of the BOJ
New Zealand January Services PMI 52.6 vs. 51.5 prior
CNBC – Australian Treasurer Swan says high $A a worry
Australian government plan to boost manufacturing
UK February House Prices +1.1% Y/Y (up 2.8% M/M) according to the Rightmove survey
New Zealand PM John Key said NZ consumers were better off from higher NZD
S&P said it could lower Japan's rating if real funding costs increased
Let's get EUR/USD, GBP/USD, AUD/USD and NZD/USD out of the way first. They all had a fairly quiet session in a limited range, but note that all traded lower as the USD strength showed outside of USD/JPY today.
USD/JPY was, not unexpectedly, where the activity was focused in today's market. It opened in the early New Zealand day with a slight gap up on the New York close and traded relatively quietly for the first few hours, never falling below its opening level but finding offers above 93.85. Tokyo opening saw it continue to trade quietly, but bid. It was only when PM Abe started to comment, reiterating his strong views about policies required to beat back deflation (see bullets, above) that USD/JPY took out the sell orders ahead of and at 94.00. It had a few goes at 94.20 but settled 94.05/94.18 for the balance of the session as I type.
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