INSIDE ASIA: Yen Falls on Stimulus Hopes, EMFX Mixed Before Fed
(Bloomberg) -- Yen weakens to session low on FNN report that PM Abe will unveil stimulus package today while emerging Asian currencies are mixed in sidelined trading ahead of Fed and BOJ policy meetings.
- Japan’s stimulus package to be 27t yen, FNN reports, adding that Abe will announce the details this afternoon
- Divergent forces are in play for Asia-Pacific currencies at the moment, OCBC strategist Emmanuel Ng says in interview
- JPY may be reacting to the Nikkei article about BOJ while EM Asia could be reading off positive equities and risk appetite, FOMC notwithstanding
- Top BOJ officials are said to be looking at multiple proposals including cutting rates further into negative territory, expanding govt bond buying beyond 80t yen annual level, or expanding purchases of other assets such as ETFs, Nikkei reports, without attribution
- Yen snaps two-day rally while govt bonds advance across the curve before BOJ policy announcement on Friday
- USD/JPY gains may be due to re-pricing of BOJ easing, SMTB says
- JGB yield curve flattens, led by super-longer tenor after 40-yr auction and on expectations of BOJ easing: Mizuho
- Best way to sustainably depreciate yen would be to forgo easing this month and announce a comprehensive policy review toward Sept. meeting: Citigroup
- USD/JPY probably won’t decisively break 110 even with Japan easing policy this week, while JGB yields will remain under pressure regardless: BofAML
- Aussie extended advance to session high after 2Q CPI data before erasing all gains by midday in Sydney
- Aussie bond yields surged across the curve while futures volume jumped after core CPI rose faster than expected; OIS swaps now signal 51% chance of RBA rate cut in Aug. vs 63% yday
- AUD/USD lifted by macro selling only to encounter more of the same higher up, according to an Asia-based FX trader
- 2Q trimmed mean CPI up 0.5% q/q vs est. 0.4% gain; consumer-price growth weakened of late, in line with global disinflation and record-low domestic wage growth
- Onshore yuan set for a second day of gains on stronger PBOC fixing and broader gains in Asian currencies
- China June industrial companies profit rose 5.1% y/y
- Yuan to remain stable under PBOC management till Oct: Scotiabank
- Shortage of quality Chinese assets will likely continue into 2H, which would force financial institutions to increase their exposure to debt, CICC analysts including Jianheng Chen wrote in note dated July 26
- Morgan Stanley is upbeat on emerging mkts as developed economies’ policies are expected to remain accommodative following ECB meeting last week and ahead of the Fed and BOJ meetings this week, it said in note yesterday
- Won headed for second day of gains
- Financial imbalances could increase if there is too much easing, BOK Governor Lee says
- Consumer confidence index rose to 101 in July, highest since April, from 99 in June
- Rupiah set to snap three-day decline ahead of cabinet reshuffle
- Indonesia said to announce cabinet revamp 2pm local time Wednesday, Kompas reports, adding that President Widodo may give finance minister mandate to Sri Mulyani Indrawati, managing director at World Bank
- Baht lower ahead of trade data; 10-year govt bond declines
- June trade data due at 11am local time; exports est. -2.60% (prior -4.40%); imports est. -8.90% (prior 0.50%); trade balance est. $1.5b (prior $1.54b)
- BOT isn’t concerned by baht strength, Deputy Governor Mathee said yesterday
- Ringgit declines
- Goldman accused in a lawsuit of selling out a client to curry Malaysian PM’s favor
- 1MDB says looking for new auditor after Deloitte previously notified co. in Feb. of intention to resign: statement yday
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Emmanuel Ng (Oversea-Chinese Banking Corp Ltd)
Mulyani Indrawati (World Bank Group/The)
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