Week in FX Asia – China Data Boosts Asian Currencies

The IMF has outlined the top three risks to global growth are as follows: US Fed QE tapering, Japanese monetary policy and Chinese low growth. This week Chinese factory output data beat expectations. Factory production increased 9.7 percent year over year. That along positive retail sales growth of 13 percent have given analyst enough to start talking about economic stabilization.

The numbers out of China boosted local markets and abroad. Confidence was restored in the China growth story which benefits commodity exporters such as Australia and Canada. Given the current US dollar weakness due to lack of clarity surrounding the possible end of QE, emerging markets appreciated versus the USD.

Bank of Japan Keeps Stimulus Unchanged

BoJ Governor Kuroda is still happy with the progress the Japanese economy has made in the last couple of months. Not enough to upgrade the assessment of a moderate recovery but sufficient to keep the current stimulus program at the same bond-buying pace.

The biggest comments this week was around the upcoming sales tax hike. Kuroda backs the plan even as the IMF among others point out that it will probably set Japan back in growth terms. The BoJ points to the economy supporting the hike, which is needed to repair public finances.

• China Factory Output Rises 9.7 Percent in July
• Japan Debt Tops One Quadrillion Yen
• China Inflation Steady at 2.7 Percent
• India’s Central Bank Introduces New Measures To Boost Rupee
• Asian Stocks Drop as USD/JPY settles below 97
• Chinese Data leads Asian Currencies in Solid Week
• Singapore Recovery Strengthens as Economic Forecast is Lifted
• China Recovery Remains in the Spotlight
• China Central Bank Injects Almost 2 Billion into Banking System
• Japan Current Account Surplus Grows in First Half of Year
• Bank of Japan Maintains Stimulus as Economy Recovering Moderately
• Japan PM Abe Calls for Expert Opinions Before Final Tax Hike Decision
• Chinese Exports and Imports Beat Expectations in July
• China Trade Data Exceeds Expectations
• Japan and US Launch TPP Negotiations on Autos and Nontariff barriers
• India New Head of Central Bank Former IMF Economist
• Japan Faces Tough Tax Hike Hurdle
• What the RBI Could Learn About Currency Defence from Turkey’s Central Bank
• IMF Supports Japanese Tax Hike But Warns it Will Hurt Growth
• Australia a Victim of its Own Good Fortune
• Asia’s Exports Suffering Despite U.S. Recovery

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