USD/JPY
jumped today after a speech from Bank of Japan Deputy Governor
Shinichi Uchida. The details are in the link above, but in brief he
once again reiterated the importance of holding monetary policy at
easy settings, and added that the BOJ is unlikely to raise interest
rates aggressively, even after ending its negative interest rate
policy.
He
head plenty more to say (see link above).
On
the data agenda the focus was on China’s inflation (deflation) data
for January. The CPI fell y/y (at -0.8% for a deflation result again)
at the fastest pace since the global financial crisis. Not all the
data showed deflation, tough. Core inflation (CPI excluding food and
energy prices) gained, up 0.4% y/y from +0.6% in December. The m/m
headline rose also.
For
2023 as a whole the CPI rose 0.2% y/y, well short of the PBoC 3%
target. This is not too unusual, though, its fallen short of target
now for 12 consecutive years. I argued in a post above that with Loan
Prime Rates (LPRs) sticking at 3.45% for the one-year and 4.20% for
the five-year the further deflation today has, in effect, raised real
rates in China yet again.
Chinese
stocks continued their bounce into the long (Lunar New Year) holiday.
Chinese markets are closed on Friday February 9, they will reopen on
Monday February 19.
Hong
Kong and Singapore markets will have brief closures (see bullets
above for details).
The CSI 300 Index tracks the performance of the top 300 stocks listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange. It’s considered a benchmark for the overall performance of the Chinese A-share market.
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The index includes the largest and most liquid A-share stocks, covering a wide range of sectors.
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It covers sectors such as financials, industrials, consumer discretionary, technology, and healthcare.
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Its widely used by fund managers and investors as a benchmark for China’s stock market.
Read More: ForexLive Asia-Pacific FX news wrap: USD/JPY pops on BOJ official dovish remarks