ForexLive Asia-Pacific FX news wrap: NZD up, JPY too but retraces, CNY setting strong - ForexLive

Reserve Bank of New Zealand - read from the bottom up for the chronological order:

Other:

It was a busy day in Asia with Australian inflation data, a more hawkish Reserve Bank of New Zealand, and a Bank of Japan policy board maker standing in front of the freight train of USD/JPY selling and helping turn it around. For now at least.

Australian monthly inflation data for October came in well down from September and under the median estimate. Looking further ahead, base effects should contribute to a further, and rapid, fall in the rate for the next few months ahead, although these effects will dissipate into the new year.

There are, of course, caveats to today's data release:

• Monthly CPI data from Australia does not show all components of the CPI, covering only updated prices for between 62 and 73 per cent of the weight of the quarterly CPI basket.
• October data had a large 'goods' representation compared with services so its lower than it otherwise would have been.
• The core, trimmed mean, didn't fall much at all from its reading in September. The underlying inflation pressure is still solid.
• Inflation rates for most components are still much higher than the RBA’s 2-3% inflation target.

AUD/USD dipped a little on the data but rose soon after, led by a strong NZD (more on this to come). As I post its back to being barely changed on the session.

The Reserve Bank of New Zealand left its Official Cash Rate (OCR) unchanged at 5.5%, as widely expected, but the statement, minutes and Governor Orr’s following press conference were hawkish. The Bank said it’ll hold rates high for quite a while to come as inflation is still too high. The Bank revised its track for the OCT higher, implying a better-than-even chance of another 25 bp rate hike ahead.

NZD/USD jumped higher, to above 0.6200, and its just under there as I update.

Bank of Japan Policy Board member Seiji Adachi spoke, hitting back at the article in the Nikkei yesterday, link to this here ICYMI:

Adachi emphasized that:

• recent tweaks to YCC were not a policy change
• now is not the time to say the Bank's inflation target has been met
• policy will remain easy, and indeed the Bank will take further easing steps if needed

USD/JPY hit lows under 146.75 but since bounced back.

More broadly the USD weakened further across the major FX board. US yields remained under pressure after dovish Fed officials on Tuesday:

The People’s Bank of China set its reference rate today at the strongest for the CNY since June 5.

The bird in flight:

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2023-11-29 04:37:09Z
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