Back
10 Dec 2014
Asia Recap: Tokyo keep selling Yens
FXStreet (Bali) - Following a massive flush out of USD longs - mainly fast money - during the last NA session, the world's reserve currency traded generally softer again in Asia, with the Japanese Yen still performing in quite a resilient fashion.
On the back of a flash crash sub 118.00 - daily 20EMA - , the USD/JPY managed to extends its vigorous bounce over 2 cents all the way up to test offers ahead of 120.00 - highest at 119.89 in Tokyo -, although sellers came into action again, trying to jump on the JPY bullish momentum - in contradiction with overall uptrend though - to drag the rate down below 119.00, where bids were seen re-emerging.
AUD/USD remains in a solid downtrend, however, the vicious bounce off 0.8220 warrants prudence to re-join the bearish party. In Asia, an attempt to break through 0.8255/60 support failed, allowing the Aussie to regain 0.83, registering session highs in Tokyo afternoon circa 0.8310/15. While a very poor Westpac's consumer sentiment report initially weighed on AUD, with further evidence of disinflation pressures in China adding to the selling pressure, a notable turnaround was seen on a late Asia broad-based USD bear leg, led by USD/JPY sales. It is also worth noting varies investment banks now calling for further easing by the PBoC, as Nov's CPI suggests the Chinese economy is weakening, a talk, that if growing louder, may support the Aussie, even if only worth a short-lived spike.
NZD/USD was buffeted in a tight 0.7660-0.77 range, with traders mostly sidelined ahead of the RBNZ policy decision on Thursday, expected to hold rates unchanged at 3.5%, while re-iterating that the hefty NZD level is 'unjustified and unsustainable'. NZD was supported by a weaker USD, containing the downside for now. Sentiment towards the Kiwi has worsened in the intervening 24h, following NZ's Fonterra decision to cut the 2014/15 forecast farmgate milk price to NZD 4.70/Kg from NZD 5.30/Kg, with Fonterra in Asian hours, via Reuters, that they now see lower China dairy consumption growth through 2020 vs previous forecast due to a slow down in Chinese dairy uptake, reflecting slower economic growth. Fonterra also said that recovery in global milk powder prices will take longer than expected.
Key headlines
NZ's farmers in a position to handle one tough year - ANZ
Drop in NZ farm gate milk price equivalent to -2.7% of NZ GDP - Westpac
NZ Industry Ministry expects 9.5% decline in 2014-2015 primary exports
Australia Investment Lending for Homes fell from previous 3.7% to 1% in October
Australia Home Loans came in at 0.3%, above forecasts (0%) in October
Australian consumer confidence collapses in December
China's disinflation pressures worsen
US Congress avoids shutdown
China CPI warrants more aggressive monetary policy - ANZ
On the back of a flash crash sub 118.00 - daily 20EMA - , the USD/JPY managed to extends its vigorous bounce over 2 cents all the way up to test offers ahead of 120.00 - highest at 119.89 in Tokyo -, although sellers came into action again, trying to jump on the JPY bullish momentum - in contradiction with overall uptrend though - to drag the rate down below 119.00, where bids were seen re-emerging.
AUD/USD remains in a solid downtrend, however, the vicious bounce off 0.8220 warrants prudence to re-join the bearish party. In Asia, an attempt to break through 0.8255/60 support failed, allowing the Aussie to regain 0.83, registering session highs in Tokyo afternoon circa 0.8310/15. While a very poor Westpac's consumer sentiment report initially weighed on AUD, with further evidence of disinflation pressures in China adding to the selling pressure, a notable turnaround was seen on a late Asia broad-based USD bear leg, led by USD/JPY sales. It is also worth noting varies investment banks now calling for further easing by the PBoC, as Nov's CPI suggests the Chinese economy is weakening, a talk, that if growing louder, may support the Aussie, even if only worth a short-lived spike.
NZD/USD was buffeted in a tight 0.7660-0.77 range, with traders mostly sidelined ahead of the RBNZ policy decision on Thursday, expected to hold rates unchanged at 3.5%, while re-iterating that the hefty NZD level is 'unjustified and unsustainable'. NZD was supported by a weaker USD, containing the downside for now. Sentiment towards the Kiwi has worsened in the intervening 24h, following NZ's Fonterra decision to cut the 2014/15 forecast farmgate milk price to NZD 4.70/Kg from NZD 5.30/Kg, with Fonterra in Asian hours, via Reuters, that they now see lower China dairy consumption growth through 2020 vs previous forecast due to a slow down in Chinese dairy uptake, reflecting slower economic growth. Fonterra also said that recovery in global milk powder prices will take longer than expected.
Key headlines
NZ's farmers in a position to handle one tough year - ANZ
Drop in NZ farm gate milk price equivalent to -2.7% of NZ GDP - Westpac
NZ Industry Ministry expects 9.5% decline in 2014-2015 primary exports
Australia Investment Lending for Homes fell from previous 3.7% to 1% in October
Australia Home Loans came in at 0.3%, above forecasts (0%) in October
Australian consumer confidence collapses in December
China's disinflation pressures worsen
US Congress avoids shutdown
China CPI warrants more aggressive monetary policy - ANZ