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The
post-FOMC unwind of long USD/JPY carried on further again in Asian
morning trade on Tuesday. USD/JPY dropped hard and fast, to lows
(briefly) under 130.50. Japanese finance minister Suzuki made
comments decrying the ‘rapid yen moves’. He, and other Japanese
officials, had been very vocal indeed about not wanting such rapid yen
FX moves when the currency was weakening but its taken 700-odd points of
fast USD/JPY decline for Suzuki to make a similar remark as yen has gained
back some strength. USD/JPY is probably around an acceptable level
for Suzuki and the government at current levels, hence his commens
today trying to stem the drop. I don’t think what the Japanese
government wants from the exchange rate is of much importance right
now though. They certainly showed their worthlessness on the way up
for USD/JPY.
The
focus of the session was on geopolitics, specifically the likely
visit to Taiwan by US House Speaker Nancy Pelosi. Media reports are
saying Pelosi is expected to arrive in the country on Tuesday
evening. China has objected, in strenuous terms, to the visit. The
Taiwanese military have said they have increased their combat
readiness but have not raised their alert level. So far China has
flown its warplanes close to Taiwanese airspace and sent its warships
close also.
Regional
stocks are shaky, lower on the session. The Hang Seng, Nikkei,
Shanghai Comp, China A50, Australia, KOSPI, all lower.
On
the central bank front we had intervention again from the Hong Kong
Monetary Authority to prop up the HKD (its fallen to the weak end of
its trading band). Still to come is the Reserve Bank of Australia
decision, due at 0430 GMT. A 50bp rate hike is widely expected, there
are previews in the points above.