ForexLive Asia-Pacific FX news wrap: USD/JPY pops above 159.10 briefly

• Tune in Monday for the Bank of Japan Summary of its June meeting
• Bank of Spain Deputy Governor speaking Friday
• Japan will resume subsidies for utilites and continue with gasoline subsidies
• Ex-Fed Bullard says he expects a slow pace of rate cuts from the FOMC
• North Korean soldiers crossed into South Korea again, the third time this month (so far)
• PBOC sets USD/ CNY reference rate for today at 7.1196 (vs. estimate at 7.2698)
• Japan finance minister Suzuki – excessive, disorderly fx moves could hurt economies
• Japan chief cabinet secretary Hayashi says stable FX levels are desirable
• Japan preliminary manufacturing PMI for June 50.1 (prior 50.4 in May)
• USD/CNH surging towards 7.30 as the PBoC dial back yuan support – fixing coming soon
• Canada’s government is preparing a potential tariff package on Chinese-made EVs
• Japan data – May CPI Headline 2.8% y/y vs. 2.9% expected
• Japan’s Kanda says ready to take action if excessive FX move seen
• Australia preliminary June PMI: Manufacturing 47.5 (prior 49.7) Services 51.0 (prior 52.5)
• Bank of America has lowered its forecast on EUR/USD, not liking the dollar as much either
• Trump immigration policy – College graduates to automatically get a Green Card
• JP Morgan says covering of shorts, less short selling, helpful in fueling higher equities
• Fed’s Barkin says wants clearer signals on falling inflation before a rate cut
• ICYMI – Yellen spoke Thursday on inflation, China tariffs
• Five reasons why the Japanese yen closed at a 34-year low
• Trade ideas thread – Friday, 21 June, insightful charts, technical analysis, ideas
• US Treas Secretary Yellen says crytocurrency used in Fentanyl trafficking (only a little)
• Forexlive Americas FX news wrap: US housing starts plunge

The
focus for the session was on Japan’s May inflation data.

Prior
to this we had poor preliminary PMI data from Australia for June.
AUD/USD has done very little on the session.

Japan’s
inflation was mixed, with the headline and ‘core’ (excluding
fresh food) rising while core-core (excluding food and energy) fell
to its slowest since September 2022. While the data was not conclusive there
is likely to be enough in it to allow the Bank of Japan to raise
short term rates at its next meeting (July 30 and 31) if it chooses
that path. There will be another CPI reading prior to that meeting so
it may be too early to reach a view on this.

Also
from Japan today we had verbal intervention comments from, in order:

• Vice-minister
  for international affairs at Japan’s Ministry of Finance Kanda. He is
  the official who will instruct the BOJ to intervene, when he judges
  it necessary.
• Japan’s
  chief cabinet secretary Hayashi
• Japan’s
  finance minister Suzuki

Also, reports
out of Japan say utility subsidies are to resume, gasoline subsidies
will remain, and measures to reduce the burden of electricity and gas
prices are being prepared.

In late US time the US Trasury released its latest “Macroeconomic and Foreign Exchange Policies of Major Trading Partners” report. It put Japan back on currency manipulation monitoring list

USD/JPY
traded up above 159.10, but only briefly. Its back around 158.90 or
so as I update.

Major
FX rates apart from those mentioned already traded subdued ranges
only.

As
a heads up, it could be a volatile US session, especially for the
equity and equity derivative folks. Friday’s ‘Quad Witching’
options expiry is the largest ever. US$5.1 trillion in notional
options exposure expiring, including $870 billion in single stock
options.

USD/CNH is off its high. The PBOC did nudge the CNY a touch weaker again at the reference rate setting today, but by only 4 ticks (7.1196 today vs. 7.1192 on Thursday) :

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