Trade ideas thread - Friday, 25 October, insightful charts, technical analysis, ideas
Late in the US afternoon (really late) Japan's Finance Ministry's Vice Finance Minister for International Affairs Atsushi Mimura crossed the newswires indicating that finance minister Kato met US Treasury Secretary Yellen on Thursday. FX was one topic of discussion. I noted at the time that earlier this year, when USD/JPY was surging up towards 160 Yellen met with the prior set of officials from the Ministry of Finance. Yellen was very cold on the idea of any US participation to support the yen.
Mimiura added some 'hot button' intervention remarks (see bullet above), in brief:
USD/JPY barely moved on all this.
Tokyo area inflation data was published a little later, with all three main measures coming in under the Bank of Japan 2% target:
A little later we had 'services PPI' for September, in at 2.6% (from 2.7% in the prior month).
I'm not convinced that lower CPI will stop the Bank of Japan from hiking rates, they seem to be intent on doing so. The Bank meet next week (30 and 31) but are expected to remain on hold with a rate hike viewed as more likely at the December or January meeting. Having said this, the yen was sold a little on the data. USD/JPY popped to around 152.10 before slipping back down to lows back under 151.80. Its around 151.85 or so as I write.
We had mild verbal intervention remarks from Japan's economy minister.
From China today was a Medium-term Lending Facility (MLF) injection that did not fully offset the maturing amount. The rate on the new funds made available was unchanged at 2%. China's mortgage rate cuts also came into effect today. More in the points above.
Over this coming weekend Japan goes to the polls for its general election. The ruling LDP is expected to lose seats, but still be able to form coalition government. Again, more in the points above.
Major FX traded very small ranges, as did oil. Gold lost a little ground