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ForexLive Asia-Pacific FX news wrap: Rebound Day. For now anyway.

After
Monday’s collapse in Japan’s Nikkei today was a case study in
‘Turnaround Tuesday’. The Nikkei 225 surged as soon as the cash
market opened, so much so that a circuit breaker trading halt was
called in futures after the rapid opening jump higher. The Nikkei
continued to rise. The yen slipped lower, with USD/JPY rising to
around 146.50 before dropping back.

Some
of the credit for the stabilisation of markets can probably go to
Federal Reserve Bank of San Francisco President Mary Daly. Daly spoke
in measured terms, saying rate cuts lie ahead in coming meetings,
that the labour market is slowing but “not falling off a cliff”,
that policy needs to be pro-active, and other soothing remarks.

From
Japan today were data showing workers’
real wages rose for the first time in more than two years. This
is a precursor (but not a guarantee) to a
recovery in consumption and the emergence of a positive growth cycle
long sought after
by
Bank of Japan
and other officials.

Still
to come is the Reserve Bank of Australia policy decision and
accompanying statement, the quarterly Statement on Monetary Policy
(SoMP) and Reserve Bank of Australia Governor Bullock’s press
conference. A ‘hawkish hold’ is expected from the Bank.

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

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