Wednesday, November 30, 2022

ForexLive Asia FX news wrap: BOJ JGB intervention again | Forexlive

USD / JPY was the big hit today during the session here in Asia. The early high was around 123.20 and as I posted this cover it fell below 121.85.

The Bank of Japan has announced an expansion of its extraordinary JGB purchase program (details in the bullet points above) to terms other than 10 years and in larger amounts. The Bank of Japan is doing this as the yield on the 10yr threatens to rise above its targeted 25bp ceiling. For the (stronger) movement for the yen, however, repatriation is in yen as the end of the Japanese financial year approaches. I posted about this yesterday and the big windfall gains for those who bring funds from overseas back to yen (repatriation and exporters).

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A speech by the Federal Reserve Bank of Atlanta, President Raphael Bostic, sounded a warning note about upcoming Fed rate hikes. Bostic does not jump on the 50bp stroller if his remarks are something to check. He warned about the risk of claiming the wart in Ukraine and (again) said he supported 6 interest rate hikes this year. This was a factor that weighed on the USD during the session, along with sentiment improvement that Russia is withdrawing from Ukraine. EUR / USD marked slightly higher and is back above 1.1110 as I post. Cable also strengthened a few points.

AUD / USD did not change much net. NZD / USD also marked higher. ANZ’s business survey published today provided further indications of unbridled inflationary pressures in the country. RBNZ rate hikes remain on course.

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Tuesday night (local time) we had the Australian Federal Building. It was a pre-election budget and as such contained a number of spending items for the voters. More government stimulus in an already hot economy has prompted some calls from analysts for more rate hikes by the Reserve Bank of Australia. Nomura is in the bullet points above. Goldman Sachs updated their RBA rate hike forecast. GS searched for hikes

September, October and November. Following the budget, analysts at the bank also added a rate hike in August.

Usdyen Graph Envelope 30 March 2022

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