Asian Currency

MORNING BID ASIA-Japan’s FX no-show, Meta plunges


April 25 (Reuters) – A look at the day ahead in Asian
markets.

The depreciation of Asian currencies against the U.S. dollar,
and the steps monetary authorities may take to prevent further
weakness, dominate the market landscape across Asia on Thursday
as the Bank of Japan gets its two-day policy meeting underway.

The regional economic data highlights include South Korea’s
first quarter GDP, Malaysian consumer price inflation for March,
and the latest trade figures from Vietnam and Hong Kong.

After-the-bell earnings from U.S. tech giant Meta on
Wednesday could weigh on Asian markets – shares plunged 10% in
after-hours trade.

Sentiment is fragile: some stock markets have recovered
around half of their recent losses but Meta’s slump throws a
cloud over that, while U.S. bond yields spiked following a weak
auction of five-year notes.

Unease around currencies is deepening after the dollar on
Wednesday smashed through 155.00 yen with no sign of Japanese
authorities to slow or reverse the yen’s fall. Will Tokyo act?

An executive from Japan’s ruling LDP told Reuters the party
is not yet in active discussion on what yen levels would be
deemed worth intervening in the market, but a continued slide
towards 160 or 170 to the dollar could trigger action.

It’s hard to imagine the Ministry of Finance letting the
dollar go to 160 never mind 170 yen before intervening. Then
again, few would have imagined there would be no intervention at
155 yen either.

Will MOF instruct the BOJ to wade into the FX market and buy
yen just as the central bank starts its two-day policy meeting?

In the current climate, which prompted a rare three-way
joint statement on exchange rates from the United States, Japan
and South Korea this month, nothing can be ruled out.

In the realms of surprises, Indonesia’s rate hike to counter
the weakness of the rupiah would have caught many market
participants off guard. The currency’s subsequent 0.4% bounce
was modest, but was the biggest in seven weeks and enough to
pull it further from last week’s four-year low.

There will be more than a few grumbles across Asia at
Tokyo’s reluctance to anchor the yen, which is giving a huge
competitive boost to Japan – the yen is at a 31-year low against
China’s yuan and close to multi-year lows against the currencies
of South Korea, Thailand, Vietnam and others.

India’s central bank has intervened regularly recently to
support the rupee and Bank of Thailand officials said on
Wednesday the BOT intervened to ease excessive moves in the
baht.

U.S.-Sino relations took another twist after the U.S. Senate
voted in favor of legislation that would ban TikTok in the
United States if its Chinese owner ByteDance fails to divest the
popular short video app over the next nine months to a year.

Here are key developments that could provide more direction
to markets on Thursday:

– Bank of Japan begins policy meeting

– South Korea GDP (Q1)

– Malaysia inflation (March)

(Reporting and Writing by Jamie McGeever;
)



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