Japan yen intervention official says will take appropriate action against excess FX movesChina one year bond yield drops to 1%, first time in 15 yearsNew Zealand credit card spending -3.2% y/y in November (prior +0.3%)South Korea to ease FX regulations to improve liquidity conditionsU.S. authorities may ban Chinese-made TP-Link internet routers, used in millions of homesPBOC sets USD/ CNY reference rate for today at 7.1901 (vs. estimate at 7.3086)USD/JPY (finally) responds (a little) to intervention commentsPBOC sets 1 year Loan Prime Rate (LPR) at 3.1% and 5-year at 3.6%, both unchangedJapan fin min Kato with verbal intervention on JPY – recent one-side, sharp yen movesAustralian November data – Private Sector Credit +0.5% m/m (expected +0.5%)People’s Bank of China Loan Prime Rate (LPR) setting due today – why its less relevantUSD/JPY hits a 5-month high just shy of 158.00Largest construction machinery firm fears Trump tariffs – our business based on free tradeUS Bill to avert a government shutdown has failedJapan November headline CPI +2.9% (expected +2.9%, prior 2.3%)The Federal Reserve saved US equities from a bubble (but there’s still a chance!)US inflation (PCE) data due Friday – here are the critical ranges to watchNew Zealand exports in November higher than in October (imports lower)Forexlive Americas FX news wrap 19 Dec: BOE keeps rate unchanged but is more dovishFederal Reserve monetary policy has entered a new phase – may be quite differentUS broader indices give up gains and close lower on the dayNew Zealand December consumer confidence jumps into optimism! 100.2 (prior 99.8)Trade ideas thread – Friday, 20 December, insightful charts, technical analysis, ideas
From
Japan today we had inflation data for November. Inflation rates moved
solidly higher, well above the Bank of Japan 2% target level, above
expectations, and above October levels. The “core-core”
inflation rate, which strips out prices of fresh food and energy and
is the closest to the US measure of core inflation moved to its
highest level since April.
Despite
this the yen slid even lower, with USD/JPY ticking to 5-month highs
above 157.90.
Then
we had intervention type comments from Japan’s finance minister
Kato. He used forthright words such as:
one-sidedsharp
movesspeculation
which
are indicative of a greater degree of concern.
It
took some time, but eventually the yen displayed some strength, with
USD/JPY dropping back towards 157.15 and thereabouts. Its since been a little lower.
China
left its benchmark lending rates unchanged, as expected, at the
monthly fixing today.
the
one-year loan prime rate (LPR) was kept at 3.10%,
the
five-year LPR unchanged also, at 3.60%.
These
rates were last cut in October; the 1-year by 25bp from 3.35% and the
5-year also by 25bp, from 3.85%. These cuts were the largest since
the LPR reform in August 2019 and marked the third reduction in 2024.
In
other news the US government moved closer to a shutdown. A bill aimed
at furthering funding for the government, promoting Trump’s
recommendation to further expand US government debt failed in the
House in Congress. Republicans have a majority in the House but many
disagree with fiscal profligacy.
Still
to come is the critical US inflation data – PCE – at 8.30am US
Eastern time. There is a ‘ranges to watch’ preview above.
***
As I was posting we had more intervention type comments from Japan, this time from Atsushi Mimura, Japan’s vice finance minister for international affairs, AKA ‘top currency diplomat’. USD/JPY is little changed on these so far.
USD/JPY update:
This article was written by Eamonn Sheridan at www.forexlive.com.
