China pushes for more bank lending, Japan advocates higher wages

News flow from the weekend appeared light with headlines from China and Japan being the only ones that gained major attention, apart from the wildfires in British Columbia.

That said, the People's Bank of China (PBOC) announced on Sunday, per Reuters, “China will coordinate financial support to resolve local government debt problems.”

It’s worth noting that the PBoC met with the Chinese financial regulator and the securities regulator late last week amid concerns about the spillover effects from the nation’s reality sector debt crisis, as well as doubts about the local government bonds.

"Financial support to the real economy must be strong enough" while major banks should increase lending, the statement of the joint meeting mentioned by Reuters.

On a different page, China indirectly pushes for a competition with the Group of Seven (G7) nations while marking its presence at the BRICS meeting where officials Brazil, Russia, India, China and South Africa spoke, signaled the Financial Times (FT).

Elsewhere, Japan's Central Minimum Wages Council, an advisory body to the Minister of Health, Labor, and Welfare, advised the weighted average minimum hourly wage by ¥41 in fiscal 2023, from ¥31 in the last fiscal year per Bloomberg. The same will boost the minimum wage to ¥1,002, the highest since the record-keeping began.

Japan’s push for higher wages could be linked to the recently upbeat inflation data from the nation.

Market reaction

The news fails to offer any major notable reaction on the markets as most currency pairs began the trading week with fewer changes. However, NZD/USD slumped the most, down 0.15% intraday to 0.5930 at the latest, as the Kiwi pair traders brace for July’s foreign trade numbers.

Also read: Forex Today: Pound outperforms; Turn for central bankers to speak