- China’s yuan not far from a 4 month high – policy support, COVID recovery, seasonal demand
- China to pause costly chip investments as Covid strains budget
- PBOC Guangzhou branch reportedly guides banks to provide offshore financing to developers
- ICYMI – China’s Finance Minister reiterated plans to appropriately expand fiscal spending
- BOJ Gov Kuroda says again will continue to ease monetary policy to hit inflation target
- Tokyo Gas unit nears $4.6 billion deal to buy U.S. natgas producer
- ANZ on another potential tailwind for the yen – Has the Japan Import Price Index turned?
- Federal Reserve Federal Open Market Committee (FOMC) December minutes due Wednesday
- China COVID peak? Nearly a dozen major Chinese cities are reporting recovery in subway use
- BOJ unscheduled JGB buying operation again today to control yields
- PBOC sets USD/ CNY central rate at 6.9131 (vs. estimate at 6.9133)
- ING on why demand for yuan in the onshore market should increase
- Japan manufacturing PMI for December (final) 48.9 (vs. prior 49.0)
- PBOC is expected to set the USD/CNY reference rate at 6.9133 – Reuters estimate
- UK data: Shop price index December 7.3% y/y (prior 7.4%). Food prices up a record 13.3%
- Nikkei reports that Japan PM Kishida will review price target accord with next BOJ chief
- Ex-CFO pleads guilty to stealing $5mn to trade meme stocks, cryptos (& lose it all)
- US politics update – House of Representatives adjourned, failed to elect a new Speaker
- Nikkei says Chip glut to last most of 2023, but automotive crunch persists
- ICYMI – ECB’s Kazaks sees room for significant interest rates hikes in February and March
- Economic calendar in Asia on Wednesday, 4 January 2023, a fairly light one
- Trade ideas thread – Wednesday, 4 January 2023
- Declines for the major US indices to start the trading year
It
was a very light news and data day from the Asian timezone, with a
few market-positive items out of China. China’s yuan has already
moved towards 4-month highs while stockmarkets, both on the mainland
and in Hong Kong, rose on the session.
The
positives from China included (in the bullets above but collated
here):
1. policy support for the economy:
- ICYMI – China’s Finance Minister reiterated plans to appropriately expand fiscal spending
2. A potential bounce out of COVID:
- China COVID peak? Nearly a dozen major Chinese cities are reporting recovery in subway use
3. Seasonal demand:
- ING on why demand for yuan in the onshore market should increase
4. More property market support (some sources are reporting this as “China is reportedly mulling measures to shore up “too big to fail” developers”):
- PBOC Guangzhou branch reportedly guides banks to provide offshore financing to developers
AUD,
NZD and CAD were beneficiaries, rising during the session against the
USD. EUR and GBP were also supported.
USD/JPY
popped early but has come back to be just a little lower on the day.
The Bank of Japan bought Japanese Government Bonds in an unscheduled operation for the 4th
session in a row.
Chinese shares:
This article was written by Eamonn Sheridan at www.forexlive.com.
