ForexLive Asia-Pacific FX news wrap: USD/JPY higher again

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Value leads</a></li><li><a href="https://www.forexlive.com/news/trade-ideas-thread-tuesday-1-august-2023-20230731/">Trade ideas thread – Tuesday, 1 August 2023</a></li></ul><p>
The
USD/JPY uptrend since Friday’s BOJ statement extended a little
further again here today, with USD/JPY tracking to a high circa
142.80. There was really no new catalyst, but comments from both the
Japanese
Economic Minister Goto and
Finance Minister Suzuki saying that the Bank of Japan decision
last
week
was meant to increase the sustainability of monetary easing by making
YCC more flexible and
that it did not represent a
shift in the Bank’s stance of easy policy did help to weaken the
yen when they crossed.
</p><p>The
data point of focus for the session was the second manufacturing PMI
from China for July, that from Caixin/S&amp;P Global. On Monday we
had a contractionary reading for the officially surveyed (from China’s National Bureau of Statistics (NBS)) manufacturing PMI and
a lower reading for the services PMI, and today’s Caixin
manufacturing PMI dropped into contraction also. This weighed on the
AUD, while NZD, EUR, GBP, CAD all fell against the US dollar also.
I’ve been pointing out that weaker economic data from China does
have a bright side, that it increases the prospect of more stimulus
from China. Of course the stimulus that we have seen so far has been
limited and piecemeal, and there are no signs that Chinese
authorities have an appetite for more substantial stimulus so far. So
maybe weak data is just weak data. Bad news is bad news, a new
normal! Having said this both Hong Kong and mainland China stocks are
positive for the session as I post. Not by a lot.</p><p>Still
to come, at 0430 GMT and 0030 US Eastern time is the Reserve Bank of
Australia decision for August. Analysts are more or less equally divided
on an ‘on-hold’ vs. +25bp rate hike from the Bank. Market pricing
is more decided, indicating an on hold is likely. There are previews
in the bullet points above.
</p><p>Asian
equity markets:</p><ul><li><p>
Japan’s
Nikkei 225 +0.7%</p></li><li><p>
China’s
Shanghai Composite +0.05%</p></li><li><p>
Hong
Kong’s Hang Seng +0.3%</p></li><li><p>
South
Korea’s KOSPI +1.2%</p></li><li><p>
Australia’s
S&amp;P/ASX 200 +0.4%</p></li></ul>

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