ForexLive Asia-Pacific FX news wrap: Tokyo inflation collapse, yen loses ground

• Venezuela’s President Maduro says election deal with opposition could collapse
• Onshore yuan looks set for its first weekly gain in three weeks
• PBoC, government stimulus in China are merely a “painkiller, not a cure” for the economy
• European Central Bank’s Centeno will be speaking Friday on monetary policy
• The US will sell over $130 million in bitcoin linked to the Silk Road forfeitures
• Japan finance minister Suzuki says govmt and BOJ working together to hit inflation target
• Here are the ranges of importance for the US inflation data due on Friday
• PBOC sets USD/ CNY reference rate for today at 7.1074 (vs. estimate at 7.1733)
• China’s Foreign Minister Wang Yi and US National Security Adviser Jake Sullivan to meet
• North Koreas Kim Jong Un may order lethal military action against South Korea or US forces
• JP Morgan predict easing selling pressure on Bitcoin as Grayscale profit taking stabilizes
• USD/JPY above 147.80 after Tokyo inflation drops sharply in January
• Bank of Japan December meeting minutes: Agreed to patiently maintain easy policy
• Japan December Services PPI +2.4% y/y (expected 2.4%)
• Tokyo area CPI data for January +1.6% (prior 2.4%)
• Goldman Sachs preview what to expect in the US inflation data due later
• ICYMI: U.K. suspends trade negotiations with Canada
• UBS views on EUR, GBP, USD, CHF … they most prefer the Australian dollar
• JP Morgan on the European Central Bank – watch wages data
• Intel earnings and revenues beat but the guidance is a disppointment
• US Treasury Secretary Yellen: GDP report a good thing, won’t create inflationary challenge
• Stocks close with major indices higher. 6th day in a row higher for S&P and Nasdaq..
• Forexlive Americas FX news wrap: US GDP beats estimates, dollar climbs
• Trade ideas thread – Friday, 26 January, insightful charts, technical analysis, ideas

USD/JPY
rose from around 147.50 to circa 147.85 on the back of Tokyo January
inflation data. CPI fell sharply in the month, with two of the three
measures plunging under the Bank of Japan’s 2% target. This raises
doubts on how soon the Bank can tighten its ultra-loose monetary
policy. If you glance at your charts you’ll see the USD/JPY move
was retraced just as quickly. Later data showed corporate service
inflation holding steady at a nearly nine-year high in December.

Also
from Japan today we had the minutes of the Bank of Japan December
meeting. These were quite dated, of course, we’ve had the January
meeting since. The minutes noted, in summary, discussion on the need
to keep policy loose and also flagged the need for discussion on steps to
be taken when the time comes to adjust policy.

Otherwise
news and data flow was light.

We
did get news from China that the Ministry of
Housing and
Urban-Rural Development started an inaugural meeting of the Urban
Real Estate Financing Coordination Mechanism today.
This
sent Hong Kong-listed
property developers higher on the
HKEX.

We
also had news that China’s Foreign Minister Wang Yi and US National
Security Adviser Jake Sullivan will meet in Bangkok on Friday and
Saturday to discuss the Houthi attacks on Red Sea shipping. Kirby
said that “China has influence over Tehran; they have influence
in Iran … We would welcome a constructive role by China, using the
influence and the access that we know they have, to try to help stem
the flow of weapons and munitions to the Houthis.” Oil lost ground
during the session related to this.

USD/JPY update: