ForexLive Asia-Pacific FX news wrap: Yen adds further solid gains | Forexlive
The
yen followed on from its gains on Wednesday by adding to them here
today. USD/JPY is under 148.50 as I post and yen crosses are lower
pretty much across the board.
USD/JPY
dropped under 149.00 after wages data in Japan for January. The data
showed good nominal wage gains, adding to the best wage rises in 2
decades. But, as for inflation-adjusted wages, when you mix in CPI at
its highest for 30 years real wages fell again in the data today, for
the 22nd
consecutive month. The more optimistic take is that the drop was the
slowest in over a year. As an aside, this
is partly why the Shunto wage
talks are
critical
for
the BOJ in considering their policy options
– to tighten or not. As a reminder, the next BoJ meeting is on
March 18 and 19.
Following
the small dip lower for USD/JPY we had a string of yen-bullish items
cross the wires:
- There
were reports that the Bank of Japan has approval from some government
officials to end its negative interest rate policy in the near term - BOJ
board member Nakagawa said the Japanese economy was making steady
progress towards achieving the Bank’s 2% inflation target, a sign of
her conviction that conditions for phasing out its massive stimulus
were clicking into place - Japan’s
largest industrial labour group said 25 of its member unions have so
far had their wage demands met in full during annual wage talks that
end next week. Full-time workers’ pay is set to rise 6.7%.
As
these items crossed USD/JPY fell further.
Still
to come is Bank of Japan Governor Ueda speaking in parliament from
3.10 pm Tokyo time (0610 GMT, 0110 US Eastern time).
From
China today we had January-February trade figures. China combined
import and export data for January and February into one ‘YTD’
release to smooth out the impact of the Lunar New Year holidays,
which fall in either January or February every year. Both imports and
exports improved y/y. Chinese equities rose, as did ‘China proxy’
FX like AUD.
Federal
Reserve Bank of Minneapolis President Neel Kashkari, in an interview
with the Wall Street Journal, said he may change his forecast at the
upcoming March 19 and 20 Federal Open Market Committee (FOMC) meeting
from his December projection of two cuts in 2024 to only one. He says
he has not yet decided.
AUD/JPY not as soft as other yen crosses with AUD catching a small bid from the Chinese data: