HALISTER1: INSIDE ASIA: Currencies Rise on Fed; Investors Await BOJ Meet

INSIDE ASIA: Currencies Rise on Fed; Investors Await BOJ Meet

(Bloomberg) -- Asian currencies advance as Fed reiteration of gradual approach to rate increases spur broad dollar weakness. Investors await outcome of BOJ’s two-day policy meeting.
  • Dollar is sold against Asia-Pacific currencies as FOMC statement fails to hint at rate hike in Sept., says Yuji Kameoka, chief FX analyst at Daiwa Securities
    • Though expectation for Fed rate hike was low, FOMC comments yday may trigger profit-taking action after recent USD rally
  • Yen set for a third day of gains this week while 20-year govt bonds advance
    • USD/JPY o/n implied vols highest since 2008; erratic moves in spot USD/JPY may be causing market participants to hesitate in taking cash position, using options instead, says Takuya Iwasaki, executive general manager of FX sales at Bank of America
    • Yen traders on edge after Abe underscores BOJ whiplash anxieties
    • BOJ seen easing monetary policy according to 32 of 41 economists surveyed by Bloomberg
    • Yen may strengthen even if BOJ eases policy tomorrow, Daiwa’s Kameoka says
    • Japanese bought net 679.3b yen overseas debt last week, according to figures released by Ministry of Finance in Tokyo
    • IMF says yen’s appreciation has brought it closer to fair value
  • Aussie and kiwi both strengthen against greenback
    • Broad dollar-basket selling lifts kiwi and Aussie, according to Asia-based FX trader, adding that NZD/USD buying from macro accounts triggers buy stops above 24- hour high
    • Australia’s 2Q export prices up 1.4% q/q vs est. 3% increase
  • Yuan poised for a third day rally after PBOC strengthens fixing to 3-week high
    • Authorities including CBRC noticed that burst of bubbles in property, securities investment and commodities sectors may worsen bad loan situation and even affect stability of banking system, 21st Century Business Herald reports
    • Tighter regulations on wealth-management products in China should lead to reallocation of portfolios, with managers increasing positions in bonds as they move from equities and non-standard assets, analysts say
  • Ringgit appreciates as crude rebounds from a week of losses
    • Govt was criticized for passing certain laws and National Security Council Act in particular has been deliberately misinterpreted, Prime Minister Najib said late Wednesday
    • NOTE: National Security Council Act takes effect Aug. 1
  • Baht set for a third day of strength
    • Thailand’s manufacturing production index probably increased 2.0% in June on year after 2.6% gain prior month, according to Bloomberg survey before data today
  • Rupiah extends gains as Mulyani Indrawati returns to finance minister role
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Yuji Kameoka (Daiwa Securities Capital Markets Co Ltd)
Takuya Iwasaki (Bank of America Corp)

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