Halister News

(Bloomberg) -- Japanese yen extends rally after comments from BOJ member Sato damp prospects of further easing. Korean won also gain on overnight decline in USD and stronger than est. 1Q GDP. Malaysia’s ringgit and Indonesia’s rupiah drop.

• Yen gains for third day against dollar
  • BOJ should make asset purchase operation more flexible and explore flexible approaches to monetary base target, BOJ member Sato said; negative interest rate policy has effect of monetary tightening, rather than an effect of easing, he added
  • Sato’s remarks and delayed sales-tax hike weaken odds of BOJ easing, Daiwa says
  • USD/JPY is trading heavy and placing downward pressure on rest of USD/Asia, Sue Trinh, Asia FX strategist at RBC says in interview
  • USD/JPY had a knee-jerk reaction below 109 coinciding with Sato’s comments; however, his comments revealed nothing new, and USD/JPY has recovered losses
  • S&P raises Japan’s growth forecast in 2017 to 1.0% from 0.4% on delayed tax hike which is positive for near-term expenditure
  • PM Abe yesterday promised bold economic steps in the autumn; stocks drop as stimulus plans lack details
• PBOC raises yuan fixing by most since May 12, in line with broad USD weakness; move had limited impact on onshore yuan
  • Onshore yuan’s inability to track PBOC’s stronger fixing rate today may be due to authorities’ intention to release some CNY depreciation pressure ahead of FOMC meeting in June: Natixis
• Aussie falls first day in four days after retail sales missed estimates and ahead of large options expiry near the spot
  • April retail sales rose 0.2% m/m, below est. of 0.3% gain and vs March’s +0.4%
  • April trade balance at -A$1.58b , smallest shortfall since Feb. 2015, vs March’s revised -A$1.97b vs est. - A$2.10b
  • Momentum and model accounts have sold AUD/JPY on the break of 79.00, Sato comments attracting hedge funds to establish long yen positions, trader says
  • Ex-Asia macro funds bought large amounts of EUR/AUD this morning in Hong Kong and Singapore, according to Asia- based FX traders
• Won gains after South Korea’s final 1Q GDP came in at +0.5% q/q vs +0.4% initial est. and +0.7% previous quarter
• Rupiah falls to lowest in two weeks as S&P Global Ratings keeps Indonesia at BB+ with positive outlook because of weak fiscal performance
• Indonesia gets $400m World Bank loan for fiscal reform, Investor Daily reports
• Peso gains for second day
  • Philippines’ 2016 economic growth may approach 7%, incoming Economic Planning Secretary Pernia says
  • Incoming budget chief comfortable with deficit at 3% of GDP