18 Feb 2014
Asia Recap: BoJ sinks the Yen, RBA propels the Aussie higher
FXStreet (Bali) - The Japanese Yen was the main laggard in Asia, while the Aussie found strong buying interest, topping the FX G10 climbers.
The Australian Dollar surged to test the critical level of resistance 0.9070/80 following the RBA minutes, in which further evidence of the Central Bank 'neutral stance' was obtained. Despite the rise though, the rate failed to sustain most of its gains late in Asia.
As Greg Gibbs, FX Strategist at RBS, notes: "The RBA minutes were largely as expected but may have disappointed a little by not making its desire for a weaker AUD more clear. Nevertheless, they reiterated the message from the policy statement that, 'If sustained, a lower exchange rate would be expansionary for economic activity and assist in achieving balanced growth of the economy.'"
The Yen was buttered in response to the BoJ monetary policy announcement, which caught longs the currency on the wrong foot after the Central Bank extended and enlarged their pro-growth bank loan programs, a decision that led to more than 3% gains in the Nikkei 225, acting as the driving factor to send the USD/JPY from levels below 101.50 all the way up towards 102.65/70 key resistance.
The New Zealand Dollar, unlike the Aussie, traded on a weak tone in Asia, with negative flows sending the rate to test 0.8365 lows. The Euro and Pound kept a relatively positive tone vs the USD.
Main headlines in Asia
RBA minutes: Stability in interest rates likely most prudent course
Heavy buying in AUD as RBA refrains from talking the currency down...
China January Foreign Direct Investment +16% y/y vs 2.5% expected
BoJ retains annual easing plan, pro-growth loan scheme extended
BoJ surprises market by expanding loan programs
Inflation takes more significance in Australia - RBS
The Australian Dollar surged to test the critical level of resistance 0.9070/80 following the RBA minutes, in which further evidence of the Central Bank 'neutral stance' was obtained. Despite the rise though, the rate failed to sustain most of its gains late in Asia.
As Greg Gibbs, FX Strategist at RBS, notes: "The RBA minutes were largely as expected but may have disappointed a little by not making its desire for a weaker AUD more clear. Nevertheless, they reiterated the message from the policy statement that, 'If sustained, a lower exchange rate would be expansionary for economic activity and assist in achieving balanced growth of the economy.'"
The Yen was buttered in response to the BoJ monetary policy announcement, which caught longs the currency on the wrong foot after the Central Bank extended and enlarged their pro-growth bank loan programs, a decision that led to more than 3% gains in the Nikkei 225, acting as the driving factor to send the USD/JPY from levels below 101.50 all the way up towards 102.65/70 key resistance.
The New Zealand Dollar, unlike the Aussie, traded on a weak tone in Asia, with negative flows sending the rate to test 0.8365 lows. The Euro and Pound kept a relatively positive tone vs the USD.
Main headlines in Asia
RBA minutes: Stability in interest rates likely most prudent course
Heavy buying in AUD as RBA refrains from talking the currency down...
China January Foreign Direct Investment +16% y/y vs 2.5% expected
BoJ retains annual easing plan, pro-growth loan scheme extended
BoJ surprises market by expanding loan programs
Inflation takes more significance in Australia - RBS