INSIDE ASIA: Yen Gains as Japan Denies Helicopter Money Report
(Bloomberg) -- Japanese yen advances and the Aussie falls after Japan’s chief cabinet secretary denies a report of plans to introduce “helicopter money.”
- Yen heads for its first gain in three days, while JPMorgan says stimulus planned by PM Abe may be less than expected
- Retracement in USD/JPY is due to the denial of the helicopter money report, says Khoon Goh, FX strategist at ANZ; sentiment in risk assets, such as AUD & NZD, likely to turn more cautious ahead of more Japanese official announcements
- The stimulus package and supplementary budget could be smaller than JPMorgan’s earlier estimate of 20t yen and 10t yen, respectively, the investment bank said in a July 12 note
- Chief Cabinet Secretary Suga denies Sankei report
- Nearest resistance on USD/JPY is at 105.00-25 level; should that be breached, USD/JPY may test 106, Yasuhiro Kaizaki, NY-based vice president for global markets at Sumitomo Mitsui Trust Bank says
- Yuan rises, while rest of Asian markets were mixed
- Australia 10-year govt. bond yield rises as much as 8 bps to 2.021%, the highest since June 30; U.S. 10-year Treasury yield dips 3 bps to 1.4828%; JGB steady at -0.275%,
- Expectations for global interest rates to stay lower for longer provides a good backdrop for EM in the short term given U.S. economic growth doesn’t look too hot or too cold, says Jason Daw, head of EM FX strategy at Societe Generale
- Yuan advances in onshore and offshore markets amid tighter liquidity and stronger fixing by PBOC
- USD/CNH selling led by North Asia-based banks, FX traders in the region say; overnight yuan interbank rate in Hong Kong surges to 4.83%, the highest since February
- June trade data expected at 3 p.m., with survey seeing surplus at $45.65b vs $49.98b in May; exports -5.0% y/y vs -4.1%, imports -6.2% vs -0.4%
- China has no historic right to South China Sea resources, an international arbitration court said yesterday; President Xi said the nation won’t accept any action based on the ruling
- Won gains and sovereign bonds fall amid risk-on sentiment
- Data this morning show unemployment rate at 3.6% in June vs. 3.7% est.
- Aussie drops after gaining 1.21% yesterday; Kiwi falls
- July consumer confidence dips 3% m/m to 99.1; job data due tomorrow
- Currencies in Southeast Asia are mixed
- MYR declines ahead of BNM decision today, which is expected to hold overnight policy rate at 3.25%, according to 17 of 18 economists in Bloomberg survey; Goldman expects 25 bps cut to 3.00%
- BNM will be wary about triggering renewed capital outflows and undermining ringgit despite speculation that rate cuts are on the way due to weakening growth and inflation, Capital Economics wrote in note yday
- IDR rises as country’s consumer confidence rose to a 15- month high
- PHP gains while SGD & THB fall
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Jason Daw (Societe Generale SA)
Khoon Goh (Australia & New Zealand Banking Group Ltd)
Yasuhiro Kaizaki (Sumitomo Mitsui Trust Holdings Inc)
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