ForexLive Asia-Pacific FX news wrap: Ueda talks about exit, yen rallies

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Bank
of Japan Governor Ueda spoke today, giving no indication of when he
expected to exit ultra-loose policy. Ueda said that given
the trend he sees for inflation is for it below 2% its
still
too early talk about even
a
simulation study for
exit. Nevertheless, traders latched on to him just talking about
exit, even if vaguely, and stuck a bid behind the yen. USD/JPY
dropped to lows circa 146.70 before stabilising.
</p><p>Also
from Japan today the auction of 30 year bonds showed the ‘tail’
as the longest on record. The ‘in a nutshell’ explanation of a
tail is it shows how much variation there was among the buyers in an
auction, the gap between the average price and the cut-off price (the
lowest priced bond in the auction). A large price tail is
not a positive sign, it suggests the demand for the bonds was lower
than expected. Investors in Japan are seeking higher yield premiums.
</p><p>From
China we had trade data for November, with exports coming in better
than expected and rising for the first time in 14 months. Offsetting
this good ‘green shoots’ news was a decline for imports well
under estimates, another sign of a stumbling domestic economic
recovery.
</p><p>Apart
from USD/JPY the US dollar ticked higher. Most notable against AUD,
NZD and CAD.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.