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ForexLive Asia-Pacific FX news wrap: Bank of Japan leaves rates unchanged, as expected

Major
FX rates once again tracked subdued ranges in Asia. USD/JPY popped to
above 153.50 for a time but there was no follow through. Traders
awaited the Bank of Japan policy statement (I’ll come back to
this).

News
flow was light, but we did have data from Japan, New Zealand,
Australia, and China.

On
the central bank front, apart from the BoJ, were comments from Bank
of Canada Governor Macklem, who spoke to a Commons committee with the
same message he delivered to a Senate committee on Tuesday. Macklem
says the Bank is retaining optionality on hefty rate cuts if needed:

  • “We’ve
    demonstrated we’re prepared to do a 50-basis-points cut if we think
    that’s appropriate. And if we think it’s appropriate to do it
    again, we’ll do it again.”

From
Japan were:

  • September
    preliminary industrial production data, better than expected, and
  • September
    retail sales, which disappointingly missed estimates

New
Zealand October business data (confidence and activity) improved a
little from September

From
Australia we had plenty of data, which didn’t move AUD too much at
all:

  • private
    sector credit rose by 0.5% in September, in-line with expectations,
    and in a broad-based way
  • retail
    sales came in weaker than expected in September
  • building
    approvals continued to gain

From
China we had National Bureau of Statistics (NBS) official PMIs, both
manufacturing and non-manufacturing improved, albeit a small increase
only. The manufacturing PMI rose for a second month in a row and into
expansion for the first time in six months.

The
Bank of Japan maintained its short term interest rate target at
0.25%, as expected, in a unanimous decision. In its report the Bank
made specific mention of FX.

USD/JPY
dribbled a little lower in the immediate aftermath but soon dropped
away more quickly down towards 153.00.

North Korea test fired an ICBM, setting new records:

  • it flew at an altitude over 7,000km, covered a range of 1,000km and had the longest flight time

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

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