Amid broad-based US dollar consolidation and mixed Asian equities, forex today in Asia remained within tight trading ranges, despite the Bank of Japan’s (BoJ) removal of timeframe for price target doing little to nudge the JPY bulls. USD/JPY traded better bid near 109.20 levels following BoJ’s policy announcement and mixed Japanese macro news.
Meanwhile, the Aussie traded on the back foot, having shrugged off upbeat Australian PPI release. Its OZ neighbor, the Kiwi defended minor bids amid moderate risk aversion and dismal NZ trade figures.
Both gold and oil prices remained largely subdued, as the dust settles over yesterday’s extensive rally in the US dollar while markets digest downbeat Chinese industrial profits data.
Main topics in Asia
Japan's Tokyo CPI: 0.6%, expected 0.8%
Japan's Tokyo CPI, the indicator used a way to suss out the national figures that publish at a later date, missed expectations to print at 0.6% as the Bank of Japan's struggle to breathe life into Japan's inflation figures continues to miss the mark.
North, South Korea leaders meeting underway - Reuters
As reported by Reuters, the leaders of the two Koreas are meeting today, a pivotal moment in Korea's modern history.
China Premier Li: China is open to negotiating with the US
Comments from China Premier Li Keqiang are crossing the wires via China State Media:
China industrial profits rise 3.1 percent y/y in March
China's major industrial firms reported weaker profit growth in the first three months of this year, the National Bureau of Statistics (NBS) said on Friday.
Trump to visit Britain, hold talks with UK's PM May on July 13 - Reuters
Reuters quoted the Representatives for the White House and 10 Downing Street, as saying that the US President Trump would visit the UK on July 13 and hold bilateral talks with the UK PM Theresa May, but gave no other details.
Gold slips into lows once more, eyes on $1,315
Gold is trading on the low side after falling in Thursday's trading, testing into 1,315.00.
BoJ leaves monetary policy unchanged
The Bank of Japan (BoJ) concluded its 2-day monetary policy review meeting today and announced no changes to its monetary policy settings, holding rates at -10bps while maintaining the 10yr JGB yield target at 0.00%.
BoJ deletes mention of time frame for price target in outlook report
Reuters reports the key highlights from the BoJ’s quarterly economic outlook report released following the central bank’s monetary policy decision.
Key Focus ahead
With the BoJ monetary policy decision out, the focus now shifts towards the central bank’s Chief Kuroda‘s post-policy press conference, where he would provide further insights on the BoJ’s quarterly outlook report and policy outcome.
The European session will see the Spanish CPI and growth numbers, followed by the German unemployment change and Swiss National Bank (SNB) Chairman Jordan’s speech. The main event risk for Europe is the UK prelim GDP figures for the first quarter 2018, which will have a major impact on the Bank of England’s (BOE) interest rates outlook going forward. The UK GDP growth is seen decelerating to 0.3% q/q in Q1 versus 0.4% previous.
Next of relevance for the traders remains the US advance GDP report for the first quarter, which is also expected to show a sharp slowdown in the US economic growth, following yesterday’s release of mixed US durable goods data.
EUR/USD sees 1.21 ahead of a hectic Friday
Europe has a broad dose of economic indicators dropping on Friday, but the notable entrants will be a set of speeches from ECB members, starting off with the ECB's Mersch at 05:45 GMT and Lautenschlager at 06:45, followed by a speech from the Swiss National Bank's (SNB) Chairman Jordan at 08:00 GMT.
GBP/USD: Negative setup ahead of the UK GDP release
The GBP/USD is trading on the back foot ahead of the UK first quarter GDP release. The spread or the difference between the 10-year US treasury and the UK gilt yield stands at 147 basis points - the highest level since the mid-1980s. Clearly, the widening yield differential is GBP bearish.
UK Q1 prelim GDP growth is likely to have slowed to 0.3% - Danske Bank
In the view of analysts at Danske Bank, the first estimate of the UK GDP is expected to show a slowdown in the first quarter of this year.
US GDP to grow by 1.5% in Q1 - Barclays
The Barclays Research Team offers its thoughts on today’s US first-quarter GDP report slated for release at 1230 GMT.
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