JPY/CNY, USD/JPY Flows: BoJ Kuroda: China economy likely to further slow, but still hit 6-7% GDP


Published at 00:45 (GMT) 27 Aug


JPY/CNY, USD/JPY Flows: BoJ Kuroda: China economy likely to further slow, but still hit 6-7% GDP; some market analysts too pessimistic on China; PBOC easing appropriate; Nikkei +2%, eye Shanghai stocks (ATJC8601)

BoJ Gov Haruhiko Kuroda says China growth momentum has declined somewhat and may continue to slow. China economy likely to further slow, but still hit 6-7% GDP this year and next year.

Some market analysts have become too pessimistic on Chinese economy. Drop in China imports could Asian economies. Desot not expect China slowdown to affect Japan exports very negatively in coming years.

PBoC easing appropriate to mitigate any negative impact on Chinese economy.

Asked about recent JPY rise - says BoJ does not target policy to FX, FX policy is up to MoF (he was former MoF Top FX diplomat).

On FX, BoJ Kuroda seems to be "choosing" his words very carefully. On 1 hand he acknowledges that China is slowing, but on the other hand, he says some analysts are too pessimistic. So overall, confirming possible downside risks in China economy and stocks.

Also BoJ Kuroda - after his recent controversial comments on USD/JPY level - seems mindful not to comment on FX. Recap: BoJ Kuroda saidi in parliament in reply to opposition Seiji Maehara that based on REER JPY is weak when USD/JPY was at 124.50-60 on June 10. Which triggered 2 yen fall to 122.40-50.

USD/JPY is currently below that level at 119.95-00, as BoJ Kuroda rules out further easing and on concerns over China. USD/JPY bids at 119.50-60 again, offers 120.30-50 from Japan exporters, Asian accounts, real money.

JPY/CNY closed on Wednesday at 5.3617, USD/CNY at 6.4105 - eye PBoC Fixing later. Given pressure on CNY on concerns over outflows - China stocks. Even as PBoC seeks to curb CNY weakness, given the Aug 11 deval. JPY/CNY hit near 10 month highs of 5.3977 on CFXS on Wednesday, highest since 5.4333 seen on Nov 3 2014. Eye break of 5.4000.

Nikkei +1.50% or +275.45pts at 18,652.28 - off highs of 18,810.05 seen earlier - boosted by US stocks rally. Focus on China stocks concerns - could open up, and then still wobbly, to test 8-month lows. Good to watch.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE

EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action. 

EUR/USD News

GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday

GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday

GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance. 

GBP/USD News

Gold price sits at all-time highs above $2,230, US PCE eyed

Gold price sits at all-time highs above $2,230, US PCE eyed

Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited. 

Gold News

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.

Read more

Key events in developed markets next week

Key events in developed markets next week

Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.

Read more

Majors

Cryptocurrencies

Signatures