Tech gremlins ate the Americas timezone wrap, I've included the headlines from the session here below:

OK, back to the Asia session. Bank of Japan monetary policy board member Naoki Tamura spoke and dropped this into the conversation:

  • Japan's inflation likely to slow for time being, then accelerate moderately again
  • Can't rule out chance inflation may overshoot expectations

This is a different tone than what we have heard from the Bank of Japan. Over, and over, and over again Bank officials have said they expect inflation to decline from around September/October 2023, this addition of “then accelerate moderately again” from Tamura is something new. I’m reading it as a (very) early sign the Bank is assessing some reduction in its ultra-easy policy.

  • "It's appropriate at this stage to sustain monetary easing, and earnestly scrutinise wage and price developments," Tamura said a speech to business leaders. "But I'm hoping that around January through March next year, we will have further clarity" on whether Japan can sustainably meet the bank's inflation target through wage and price data available by then, he said.

Now, don’t go betting the farm on the yen just yet, but the time is on the horizon to be alert for some sort of move from the BoJ – Tamura flagging Q1 2024. USD/JPY didn’t do a lot today. After dropping back to lows under 145.75 it popped above 146 and remains above 146.20 as I update.

Also from the timezone of interest today were July (month) inflation data from Australia. At 4.9% y/y it came in well under the consensus estimate of 5.2%. While the prospect of a September Reserve Bank of Australia cash rate hike was small this result today locks in an ‘on hold’ September decision (the meeting is on the 5th). Monthly CPI data are not as complete as quarterly CPI data, so while today’s data teases us that the RBA peak cash rate may have been reached we await confirmation from Q3 CPI due on October 25, ahead of the November 7 RBA meeting.

Early in the session, late in the US afternoon really, were privately-surveyed oil inventory data. These showed a much, much larger oil stock drawdown than was expected. Distillate and Gasoline stocks rose. For more, see bullets above.

Ranges for major FX here were not large. AUD/USD dipped after the inflation data, dragging NZD/USD with it. EUR, GBP, CAD are all a few tics down against the USD also.

Asian equity markets climbed to 2 weeks highs:

  • Japan’s Nikkei 225 +0.9%

  • China’s Shanghai Composite +0.1%

  • Hong Kong’s Hang Seng +0.6%

  • South Korea’s KOSPI +0.7%

  • Australia’s S&P/ASX 200 +1.3%

Bitcoin update after the Grayscale news hit during the US timezone:

Grayscale news Bitcoin 29 August 2023 wrap