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ForexLive Asia-Pacific FX news wrap: USD/JPY lower

Started by forex4you, Jul 25, 2024, 10:52 am

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ForexLive Asia-Pacific FX news wrap: USD/JPY lower


The
weakness on Wall Street that continued on Wednesday weighed on
regional equities here today. Despite the rate cuts from the People's
Bank of China earlier this week Chinese equities fell. The People's
Bank of China are keen to avoid further losses for stocks. The Bank announced another rate cut today. The Bank left the
Medium-term Lending Facility (MLF) rate unchanged last week at 2.5%,
but in a double surprise move they cut the rate today.

  • Surprise 1 was
    an MLF today, the PBOC have been doing these regularly on the 1th of
    each month. Today the Bank injected 200bn yuan for one year at a
    reduced rate of 2.3%.
  • The second surprise was the 20bp cut, after only 10bp cuts to the repo and LPRs on Monday.

Several
major Chinese commercial banks, such as the Industrial and Commercial Bank of
China (ICBC), Agricultural Bank of China (AgBank), Bank of Canada (BOC),
and others, announced 10 - 20 bps deposit rate cuts.

Otherwise
news
and data flow was fairly light.

That
didn't stop significant (for Asia) FX moves. AUD, NZD and CAD were
notable losers. GBP fell also but EUR has mainly tracked sideways. Gold fell under USD2370. BTC/USD is

USD/JPY
was slammed 150 points lower again. As I write its under 152.50. The
carry trade continues to be wound back, with deleveraging triggered
by this strengthening yen.

We got higher (wholesale) inflation data from Japan today. Service prices among businesses rose the most in over three decades, If this translates to consumer level inflation its another reason the BoJ has to tighten. The pass through won't be evident immediately of course. The BoJ meet next week



                This article was written by Eamonn Sheridan at www.forexlive.com.

Source: ForexLive Asia-Pacific FX news wrap: USD/JPY lower

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