ForexLive Asia-Pacific FX news wrap: USD/CNY mid-rate set lowest since September 27

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It
was a relatively small range for most major forex rates. The Chinese
yuan maintained its recent relative strength, and indeed the onshore
yuan reference rate was set at its highest since late in September.
We also heard from People's Bank of China Governor Pan Gongsheng on
the currency, saying that China will resolutely guard against
overshooting risks of the yuan exchange rate. If you’ve been
following along with the USD/CNY reference rate setting each day
you’ll know the PBOC is already doing this. He added that the yuan
will be basically stable, reasonable and balanced. On the economy and
policy he said he expects China will achieve its annual GDP growth
target of 5% this year and that the Bank will maintain prudent
monetary policy to revive real economic growth. On debt levels in China he said authorities will provide emergency funding to heavily indebted local governments as needed.</p><p>While
on central banks, Bank
of Japan Governor Kazuo Ueda said volatile currency moves were among
the side effects the central bank was scrutinizing in maintaining its
bond yield curve
control
(YCC)
policy,
in the wake of the yen's declines against the dollar once
again (highs circa 150.60 were seen today).
On
policy ahead, Ueda said the Bank won’t necessarily need to wait
until real wages turn positive for exiting YCC and negative
rates. He outlined he’d need to see confirmation on whether the
pass-through of import price rises dissipate, and if the
wage-inflation cycle kicks off as the Bank expects, as conditions that
need to be met to end YCC and negative rates.</p><p>The
Reserve Bank of New Zealand’s survey of inflation expectations
showed these falling to their lowest in 2 years. NZD/USD has tracked
a little higher during the session, it’s an outperformer albeit in
a not large range,</p><p>Oil
retraced a little after its sharp drop on Tuesday, but only a little.
This was despite the privately surveyed oil inventory data released
late in the US afternoon showing a huge headline build. There is
chatter that the number was leaked early, contributing to the oil
price slump.</p><p>Offshore yuan, hourly candles:</p>

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