ForexLive Asia-Pacific FX news wrap: Small FX ranges ahead of the US holiday Wednesday

• Reminder – PBOC monetary policy interest rate decision due Wednesday evening, US time
• Japan’s Ministry of Finance proposes selling shorter term debt as the BOJ eyes rate hike
• China’s FX regulator says Will prevent yuan exchange rate from overshooting,
• Japanese Chief Cabinet Secretary Hayashi giving assurances over troubled Norinchukin Bank
• PBOC Governor says monetary policy will provide support for China’s economic recovery
• Reminder – US markets are closed on Wednesday, June 19th – market hours impact
• PBOC sets USD/ CNY central rate at 7.1159 (vs. estimate at 7.2482)
• Hong Kong will allow trading on its exchanges during severe weather conditions, typhoons
• BOJ April Minutes show some concern about the weak yen on inflation & wages
• Japan May trade balance data: -1221.3bn yen (vs. -1300 bn yen expected)
• MUFG expects the euro to slide further into the French election
• Reuters Tankan report for June 2024: Manufacturing index +6 vs. prior +9
• New Zealand data: Q1 Current Account -4.359bn NZD (expected -4.55bn)
• RBA recap – On hold, neutral bias, full optionality over the future path of the cash rate
• RBA recap – more alert to upside inflation risks, less confident inflation is moderating
• More from RBNZ’s Conway: Headline inflation to drop to target band by year-end
• RBNZ’s Conway: Inflation may be more sticky in the near term
• More from Fed’s Collins – gonna take a while for inflation to come down
• Forexlive Americas FX news wrap: US retail sales highlight consumer angst
• Oil – private survey of inventory shows large build vs. large draw that was expected
• The string continues for the Nasdaq index. Another record close for the Nasdaq and S&P
• Trade ideas thread – Wednesday, 19 June, insightful charts, technical analysis, ideas

The
Bank of Japan published its April monetary policy meeting minutes
today. A key takeaway was that policy board members debated the
impact the weak yen could have on inflation. Some members raised the
possibility of hiking interest rates sooner than expected if
inflation overshoots. There was plenty more also, see bullets above.

We
also had trade data from Japan for May, showing solid exports in yen
terms (softer yen terms!) but volumes dropping away – weaker demand
cited.

None
of this shifted the JPY too much. USD/JPY has tracked a subdued range
of barely more than 15 points.

AUD/USD
edged higher (a small range). AUD/JPY hit its highest since April
2013. The potential for higher rates still to come in
Australia (this is a maybe, not a lock) highlights the attractive
yield spread between Australia and Japan.

US
cash Treasuries trade was closed in Japan today as per the Securities
Industry and Financial Markets Association (SIFMA) recommendation for
the US holiday on the 19th.

Major
FX traded narrow ranges only.

AUD/USD dribbling back to where it began the day after its small rise earlier:

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