It’d probably be quicker to say the EUR lagged.

AUD, NZD, CAD, GBP all rose against the USD, as did the yen. There weren’t really notable fresh catalysts, the move seemed more of a retracement of the Trump election win rally.

From Japan we had wages data, once again showing a slide for real, inflation-adjusted, wages, though not as large as in August. Base pay did show a very strong rise though, so it’s a mixed message for the Bank of Japan (the Bank next meet in mid-December but political pressure is likely to keep the Bank on hold until the new year).

Also from Japan were comments from Atsushi Mimura, Japan's vice finance minister for international affairs, AKA 'top currency diplomat'. Mimura is the Ministry official who would direct Bank of Japan intervention, should it come to that. Mimura had ‘verbal intervention remarks’, including:

  • yen moves "one-sided and drastic"
  • "closely watching developments on the currency market, including those driven by speculators, with utmost urgency"
  • “ready to take appropriate actions against excess moves"

USD/JPY backed off a little from its highs but moves were not large.

Trade data from China showed a m/m decline in imports but a strong rise in exports, the fastest growth in more than two years. It does seem that exports are being ramped up ahead of expected Trump tariffs on Chinese goods. The slide for imports is troubling, this is normally taken as a sign of a weak economy.

Chinese state banks were seen in the market selling USD/CNY, in an attempt to slow the fall of the yuan. Chinese stocks rallied after a soft opening. There may well have been some state bids helping them out. Note, the Chinese leadership meeting, the National People's Congress Standing Committee, is expected to bring further stimulus measures. This concludes on Friday.

As I prepare to post the yen has shown strength, taking USD/JPY down under 154.00.

On oil we had comments from Vitol, its CEO said expects China's oil demand to grow by 700k bpd in 2025.

USD/JPY wrap 07 November 2024 2