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11 Mar 2014
Asia Recap: BoJ maintains policy, AUD/USD keeps 0.90
FXStreet (Bali) - Tight ranges were again seen in Asia, with neither the Australian Dollar nor the Japanese Yen able to unravel an ongoing consolidation phase.
The Australian Dollar continued resilient to defend the 0.90 area, with an early decline on disappointing NAB business conditions snapping the rate to a day low of 0.9010, but the losses were quickly unwound as players opted to play the range for a return towards 0.9038 session high. There was some talk that AUD demand came from an Australian government bond issue, with a lower USD/CNY fix also helping the AUD to pare losses.
Risks for the Australian Dollar remain potential defaults in the Chinese steel sector, iron ore falling prices and any escalation on the Ukrainian crisis, all ahead of the employment report in Australia next Thursday. On the flip side, technicals for the AUD/USD still look relatively constructive as the rate hold above the daily tenkan line/0.90 round number.
With regards to the Japanese Yen, it was a very quiet session, in which the monetary decision by the BoJ to keep policy unchanged, resulted in little interest to add orders in what is still perceived as a market retaining a bullish profile after last week's 103.00 breakout. USD/JPY traded in a diminutive range between 103.20 and 103.40.
The BoJ's statement reaffirmed to continue easing until 2% inflation is stable, adding that they will examine risks and adjust policy as best suits the economy. There was no changes to the economic assessment, saying economy continues to recover moderately. One of the little tweaks in language was the cut on exports, saying they have recently leveled off, while also sounding more optimistic on capital spending.
A press conference by BoJ Governor Kuroda is due at 6.30GMT, with market participants keeping an eye on any possible clues for further easing in the months ahead. The current view is that the Bank of Japan would prefer to study the April sales-tax impact on Japanese consumers, which may threaten contraction in Q2 2014, before committing to expand their QE program.
The rest of G10 currencies were confined in a tight sideways consolidation phase, while equity indexes printed modest gains, with the Nikkei 225 up 0.1%, Shanghai +0.2%, so was Hon Kong's Hang Seng, while the Kospi saw +0.15% gains and the Australian ASX 200 ended flat.
Main headlines in Asia
AUD traders: Limited damage despite Iron ore fall-out
Distress in iron ore prices as defaults in China's steel sector mount
Australian business conditions deteriorate sharply
NZ's Key: It is likely that interest rates rise to a more normal level
Lower USD/CNY fix helps AUD/USD recover bid tone
RBNZ to hike rates to 5% by end of 2015 - BNZ
BoJ: No changes in policy, retains easing plan
The Australian Dollar continued resilient to defend the 0.90 area, with an early decline on disappointing NAB business conditions snapping the rate to a day low of 0.9010, but the losses were quickly unwound as players opted to play the range for a return towards 0.9038 session high. There was some talk that AUD demand came from an Australian government bond issue, with a lower USD/CNY fix also helping the AUD to pare losses.
Risks for the Australian Dollar remain potential defaults in the Chinese steel sector, iron ore falling prices and any escalation on the Ukrainian crisis, all ahead of the employment report in Australia next Thursday. On the flip side, technicals for the AUD/USD still look relatively constructive as the rate hold above the daily tenkan line/0.90 round number.
With regards to the Japanese Yen, it was a very quiet session, in which the monetary decision by the BoJ to keep policy unchanged, resulted in little interest to add orders in what is still perceived as a market retaining a bullish profile after last week's 103.00 breakout. USD/JPY traded in a diminutive range between 103.20 and 103.40.
The BoJ's statement reaffirmed to continue easing until 2% inflation is stable, adding that they will examine risks and adjust policy as best suits the economy. There was no changes to the economic assessment, saying economy continues to recover moderately. One of the little tweaks in language was the cut on exports, saying they have recently leveled off, while also sounding more optimistic on capital spending.
A press conference by BoJ Governor Kuroda is due at 6.30GMT, with market participants keeping an eye on any possible clues for further easing in the months ahead. The current view is that the Bank of Japan would prefer to study the April sales-tax impact on Japanese consumers, which may threaten contraction in Q2 2014, before committing to expand their QE program.
The rest of G10 currencies were confined in a tight sideways consolidation phase, while equity indexes printed modest gains, with the Nikkei 225 up 0.1%, Shanghai +0.2%, so was Hon Kong's Hang Seng, while the Kospi saw +0.15% gains and the Australian ASX 200 ended flat.
Main headlines in Asia
AUD traders: Limited damage despite Iron ore fall-out
Distress in iron ore prices as defaults in China's steel sector mount
Australian business conditions deteriorate sharply
NZ's Key: It is likely that interest rates rise to a more normal level
Lower USD/CNY fix helps AUD/USD recover bid tone
RBNZ to hike rates to 5% by end of 2015 - BNZ
BoJ: No changes in policy, retains easing plan