ForexLive Asia-Pacific FX news wrap: Yen crosses swing again

• Potential candidate for Japan PM supports BOJ continuing to hike rates
• New Zealand data – July card spending -3.8% y/y (prior -3.1%)
• China automaker lobby warns of enormous risks and uncertainty from EU tariffs on EVs
• US non farm payrolls revisions data due Wednesday – could wipe off 1mn jobs
• Federal Open Market Committee (FOMC) July meeting minutes will be published today
• Australian July leading index ticks into positive
• PBOC sets USD/ CNY central rate at 7.1307 (vs. estimate at 7.1303)
• NZD/USD looks cheap says JP Morgan
• Japan – July exports +10.3% y/y (expected +11.4%) & imports +16.6% y/y (expected +14.9%)
• An unpopular FOMC forecast – a 25bp September interest rate cut is ‘one and done’ for 2024
• OK, who’s coming to Sydney to meet Justin and I?
• HSBC is wary of a lower yen later this week
• JP Morgan says to say goodbye to the carry trade – unlikely to return to predominance
• “Mpox not new Covid and can be stopped, expert says”
• ICYMI: China is considering a new funding option for local governments to buy unsold homes
• Oil – private survey of inventory shows a headline crude oil build vs. draw expected
• Trade ideas thread – Wednesday, 21 August, insightful charts, technical analysis, ideas
• Eyes on Wednesday’s non-farm payrolls benchmark revisions

USD/JPY
continued to move around during Asia trade, covering a few laps from
just under 145.00 to just over 145.50. As I posted earlier, the
reverberations of the Bank of Japan rate hike, expectations of a
September Federal Open Market Committee (FOMC) rate cut, and the
carry unwind are all contributing. Mix in the Summer (northern
summer) markets thinner than at other times of year, and a dash of
diminished liquidity exacerbated by the wild swings.

From
Japan today we had trade data. Bloomberg carried an interview with
Katsunobu Kato, a potential candidate for the country’s next prime
minister who made clear his support for the Bank of Japan moving
further with rate hikes.

Apart
from Japan it was fairly subdued. Notably, the People’s Bank of
China set
its daily reference rate for the yuan broadly in line with
expectations, a sign it’s loosening its tight grip for the currency
its
been propping up for months and months. The PBoC (and yuan) have been
a beneficiary of the weaker USD and stronger JPY.

Some useful info is due out of the US on Wednesday:

• US non farm payrolls revisions data due Wednesday – could wipe off 1mn jobs
• Federal Open Market Committee (FOMC) July meeting minutes will be published today

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