Technical Analysis

ForexLive Asia-Pacific FX news wrap: Minor crack in BOJ resolve – sustainable inflation?

financial results from AMZN after the US regular hours close saw the
shares trashed on a disappointing outlook. AAPL shares were hit soon
after despite beats on revenue and EPS.

data focus for the session was on Japan inflation. The Tokyo area CPI
for October came in higher than expected on all three indicators. The
Bank of Japan have said in the past, consistently, that they view rising inflation
as transitory and thus the higher inflation rates showing are not a
reason to remove any policy accommodation (but … see the next few lines referring to inflation comments in the Bank’s Statement today). During the session here
ahead of the announcement, Japan’s PM Kishida announced an additional
budget for economic stimulus. USD/JPY gained a little ground in the
hours following the data, rising to highs just under 146.75.

The statement showing no change to the major policy planks was very much as expected from the BOJ. However, there did seem to be a minor concession in the
statement, the Bank referring to rising inflation
expectations, which is expected to lead to a sustained rise in inflation accompanied by
wage gains. As far as ‘pivots’ go its weak, but it is way more
than we have heard from the Bank in many years. It sets up more
interest in the meetings ahead. See the points above on the BOJ Statement for more on this.

USD/JPY dipped a little after the
statement but as I post USD/JPY is little changed from before the statement at around 146.45.

of inflation, we had higher Australian PPI data released today. This
follows the higher-than-expected consumer inflation data earlier this
week. The Reserve Bank of Australia meet next week, November 1. A
+25bp rate hike is the consensus expectation.

People’s Bank of China set its USD/CNY reference rate at its
weakest for the onshore yuan since the middle of February 2008.

fell on the session. Iron ore in Singapore fell to its lowest since
May of 2020. Concerns over softening demand cited.

Chinese stocks were back under some pressure today:

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