Week in FX Asia – Japanese Yen Appreciates As Dollar Falters

The Japanese yen continues to make inroads against the US dollar, as the pair trades in the mid–101 range in Friday trading. There is growing tension in the markets over the crisis in the Ukraine, with a referendum over Crimea scheduled for Sunday. The turmoil has triggered a flight to safety in most asset classes and the FX market is no exception. The Yen is appreciating against the US dollar creating a headache for the BoJ and an Abe government still struggling to create sustainable growth.

On the release front, US Unemployment Claims looked sharp, while Retail Sales met expectations. In the US, key events are PPI and Preliminary UoM Consumer Sentiment both disappointed. Producers reported a lower index, which does not bode well for US CPI numbers as the figures are highly correlated. Over in Japan, the BOJ released minutes of its last policy meeting, with policymakers saying the country’s economy is on track. The sole Japanese release on Friday, Revised Industrial Production, came within market expectations.

Next week central banks around the world will hold center court. Bank of Japan governor will speak on Wednesday ahed of Thursday’s FOMC. There is little expectation of direct actions but the market has been warned about the Fed modifying its forward guidance significantly in the coming meetings to reduce the focus on Non-farm payrolls and the unemployment rate headline number.

• Japan Export Growth Expected Higher
• Banks Cut China Growth Forecasts
• BOJ Meeting Minutes – The Kids Are All Right
• Chinese Premier Li Readies Economic Reforms, Stimulus
• UBS Traders Tried to Manipulate HK Libor
• RBNZ Signals More to Follow
• Twice As Nice For Japan’s Machinery Orders
• Japan’s Consumer Confidence Drops in February
• Japan Government Task Force Wants Corporate Tax Cuts
• Corporate Japan Sentiment Rises in First Quarter
• PBOC Ready To Act If Chinese Growth Stumbles
• Copper Drops Dragged By Chinese Bond Default
• Bank of Thailand Cuts Rate to 2 Percent
• Japan “Misery Index” Hits 33 Year High
• Mining Companies Hurt by Ore Drop and China Lower Exports
• China Could End Interest Rate Control in Two Years
• Japan Warns Declining Demand Will Hurt Exports
• China Approves Private Bank Pilot
• Japan Nuclear Energy Debate Reignites on Tsunami Anniversary
• Japan on Track to Meet Inflation Target
• BOJ Maintains Record Easing
• Chinese Demand for Gold Faces 17 Percent Drop
• Japan Q4 GDP Downgraded to 0.7 Percent
• Japan Hits Record Deficit

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