Ueda:
- BoJ Ueda commenting on JPY now - should avoid discussing specific yen levels
- BOJ Ueda - still more - Targeting shorter-dated yields is one option
- BOJ Ueda - more - If trend inflation does not improve, maintain YCC
- BOJ Ueda says inflation is peaking
- BOJ Ueda: standard monetary policy to not immediately respond to supply-driven inflation
Other:
- French finance minister Le Maire says Europe thinking & working on new sanctions on Russia
- Deutsche Bank on the the BoE - say only around 30% of hikes have fed into the economy
- TD expect 25 bp rate hikes from the FOMC in March and May, terminal rate range 5.00%-5.25%
- Bank of England policymaker Tenreyro will be speaking on inflation later today
- PBOC sets USD/ CNY reference rate for today at 6.8942
- USD/JPY dropping away as BOJ Gov nominee Ueda continues speaking
- Uk consumer confidence rose in February to -38 from -45 in January
- Japan inflation for January: Headline 4.3% vs. Expected 4.5%
- Reuters poll - Nearly half of Japan firms want the BOJ to change the negative rates policy
- Westpac have raised their FOMC fed funds forecast peak to 5.25%-5.5% from 4.75-5%
- Westpac have raised their RBA forecast: Peak cash rate to 4.1% (from 3.85%)
- JP Morgan CEO Dimon said Fed "lost a little bit of control of inflation”
- RBNZ Silk says all rate hike options are on the table for the April meeting
- Morgan Stanley view on EUR (skewed bullish) & GBP (skewed bearish: 3 key divergences)
- ICYMI: China said to be negotiating to supply 100 combat drones to Russia as soon as April
- Trade ideas thread - Friday, 24 February 2023
Bank of Japan Governor Nominee Ueda gave testimony before the lower house of the Diet as part of his nomination and confirmation process today. He spoke at length. The really brief summary is that:
- if trend inflation improves significantly, the BOJ needs to move toward monetary normalisation
- but the Bank expects inflation to fall, starting at the next batch of CPI data (for February, released in March)
- and that if trend inflation does not improve, the BOJ must consider ways to maintain YCC while being mindful of market distortions
There is much more from his remarks in the points above.
USD/JPY had a choppy ride of it, from fleeting highs over 134.90 at the beginning of Ueda’s remarks down to lows under 134.10 a few minutes in before rallying back and drifting around 134.70/80.
Prior to Ueda speaking Japan published its CPI data for January. Core inflation (that excluding fresh food) hit its highest since 1981.
Apart from Japan CPI and Ueda news and data flow was very light. There isn’t much to report from other major FX.
Asian equity markets:
Japan’s Nikkei 225 +1.2%
China’s Shanghai Composite -0.7%
Hong Kong’s Hang Seng -1.4%
South Korea’s KOSPI -0.1%
Australia’s S&P/ASX 200 +0.3%
Bank of Japan Governor Haruhiko Kuroda and incoming Gov. Kazuo Ueda
