ForexLive Asia Wrap: RBNZ Governor Wheeler Flips the Bird

Australia December Conference Board Leading Index -0.1% (vs. -0.2% prior)
Australia December Westpac Leading Index +0.2% (vs. +0.6% prior) (On an annualised basis it was +4.3% in December, well above its long term trend of 2.8%)
NZ job vacancies up 12.6% from December
New Zealand Q4 Producer Price Inputs -0.3% q/q (vs. -1.0% prior quarter)
New Zealand Q4 Producer Price Outputs -0.1% q/q (vs. -0.9% prior quarter)
Australia January Skilled Vacancies -0.7% m/m (vs. -2.8% prior)
Australia Q4 Wage Cost +3.4% y/y (+3.4% expected) – according to the NAB this muted rise leaves ‘the door wide open for RBA rate cuts'
Japan January Merchandise Trade Balance deteriorates further to a deficit of ¥1629.4B (vs. Prior deficit of ¥641.5B)
Reports in the Japanese press this morning that Toshiro Muto (Finance Minister Aso's preferred nominee) may be off BOJ candidate list
BOJ board member Morimoto gave a speech in which he said, amongst other things, that the BOJ aims to achieve 2% target at earliest possible time
Japan's vice finance minister is to accompany Abe on his Washington trip which starts tomorrow
Japan December All Industrial Activity +1.8% m/m (+1.7% expected)
And now for the big event today, in which RBNZ Graeme Wheeler kicked a few heads in his speech – Wheeler said the NZD was overvalued, that the RBNZ stood ready to intervene in the currency if necessary, that he wanted investors to know that the Kiwi is not a one-way bet. About the only thing he didn't do was set fire to milk powder.

EUR/USD chewed through the offers sitting ahead of and at 1.3400 today and saw stops triggered taking it to a high of 1.3434. Sell orders clustered from 1.3435 to 1.3450 held it there and it drifted quietly lower for the balance of the session.

AUD had a quiet session in a relatively tight range. There were economic data releases today (see bullets, above) but they had little immediate impact. Cross flows net sold AUD but sovereign bids for AUD/USD held it up.

USD/JPY traded to its highs of the day on the early news crossing the wires of Toshiro Muto maybe having been removed from the list of potential nominees as head of the BOJ. Of the 4 front runners, Muto was perceived as the least dovish. USD/JPY drifted back 20 points over the following hours and failed to gain ground on BOJ board member Morimoto's yen-bearish speech. It slumped around the same time NZD was being hit (see below) and went into the rest of the session quite soft but supported above 93.30.

NZD/USD lost over half a cent on RBNZ Governor Graeme Wheeler's speech today, in which he threatened to intervene in the currency if necessary (see bullets, above).