ForexLive Asia-Pacific FX news wrap: Expectations of a BoJ policy shift tomorrow rise

• BOJ to end NIRP and YCC, “a done deal” – here’s what might be a dovish surprise
• US prediction market will now accept punts on crypto price outcomes
• Goldman Sachs expects the Bank of Japan to raise interest rates on Tuesday
• Japan chief cabinet secretary Hayashi expects the BOJ to take appropriate steps
• China: Jan-Feb Industrial output +7.0% y/y (expected +5.0%), Retail sales +5.5% (5.2% exp)
• South Korea’s export of computer chips increased four months in a row as of February.
• PBOC sets USD/ CNY reference rate for today at 7.0943 (vs. estimate at 7.1995)
• Bank of Japan to conduct an unscheduled bond buying operation
• Singapore Non-oil Domestic Exports (NODX) -4.8% m/m in February (expected -0.4%)
• ICYMI – JP Morgan notes that Bitcoin has surpassed gold in investor portfolio allocation
• Japan data – January Machinery Orders -1.7% m/m (expected -1.0%)
• Weekend – ECB’s Knot says a eurozone recession has been avoided
• Reserve Bank of Australia meet this week – on hold decision expected
• North Korea fired what could be a ballistic missile (Japan’s coast guard announcement)
• Weekend – Another attack on a Russian oil refinery
• Goldman Sachs expect 3 Federal Reserve rate cuts in 2024 (from 4 previously)
• New Zealand services PMI for February 53.0 (prior 52.2)
• Financial Times front page says high Federal Reserve interest rates needed for longer
• Russian election result is unsurprising – Putin stays in power
• Trump says if he’s not elected “going to be a bloodbath for the country” (on car tariffs)
• Weekend: China finance minister Lan Fo’an reaffirmed the need for proactive fiscal policy
• Weekend – de Cos says European Central Bank could start cutting interest rates in June
• Trade ideas thread – Monday, 18 March, insightful charts, technical analysis, ideas
• Monday morning open levels – indicative forex prices – 18 March 2024

Weekend:

• Newsquawk Week Ahead: FOMC, BoJ, RBA, BoE, SNB, PBoC LPR, NVDA GTC, UK, Japan & Canada CPI
• Bitcoin technical analysis: Probably going to 69k
• Weekly Market Outlook (18-22 March)
• A technical review/preview for the major currency pairs vs USD for the week of March 18
• BOJ will likely ditch negative rates and yield curve control next week – MUFJ
• Forexlive Americas FX news wrap: Empire Fed slumps, US dollar stays firm

USD/JPY
traded a little higher early in the session. We had machine order
data from Japan that put a very minor wobble into expectations of a
Bank of Japan tightening in policy tomorrow, along with the
announcement of an unscheduled JGB buying operation to take place on
Tuesday through Thursday. After hitting a high just over 149.30 USD/JPY
subsequently has dribbled back to around 149.00 to be barely changed
on the session. Expectations
of a Bank of Japan pivot away from negative rates and yield curve
control continued to build. In the points above, for example, you’ll
find Nomura calling the BOJ tightening a ‘done deal’ and Goldman
Sachs shifting their expectation for the pivot to tomorrow from
previously forecasting an April move.

Despite
iron ore hitting its lowest level since May 2023, under $100, AUD/USD
gained a few tics higher. Its managed to sustain the small positive
on the session, helped along by data from China today for key
indicators from China; business investment, retail sales, industrial
production and unemployment showing what some are referring to as
continued ‘green shoots’ for the economy. Business
investment, retail sales, and
industrial
production
all
beat expectations. Unemployment, however, rose.

Oil
opened with a small gap to the downside but that has closed. As a
side note, Morgan Stanley raised their Q3 Brent crude forecast to $90
/ barrel, from $80.

In
geopolitics we had another missile test firing from North Korea,
along with prolonged comments from Putin, who won his sham election
for another six year term. In his remarks Putin warned that a
full-scale conflict between Russia and NATO is possible if Western
troops enter the fighting:

• ‘Anything
  is possible in today’s world. It is clear to everyone that this would
  be one step from a full-scale world war three’

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