Warnings of intervention force the yen back up from an 18-month low as markets brace for a snap election in Japan. US retail sales are solid, but K-shaped. And China’s exports are very strong overall, despite US tariffs.
In our Deep-Dive interview, ANZ’s Head of FX Research Mahjabeen Zaman takes a closer look at what a snap election in Japan means for the yen, the Bank of Japan and Japanese Government Bond (JGBs) yields.
5 things to know in 5 minutes:
Japan’s Finance Minister intervened verbally overnight to put a floor under the yen at 159 to the dollar, after it fell to an 18-month low of 159.45 to the US$, as reports mounted of a snap election for February 8, says Mahjabeen Zaman.
US retail sales growth of 0.6% in November was higher than expectations for a rise of around 0.4%, but core or control-group sales were up a more moderate 0.4%. There are concerns about a K-shaped recovery, says ANZ Economist in London Henry Russell.
The Indonesian Rupiah hit a fresh record low of just under 17,000 to the dollar yesterday, before intervention by Bank Indonesia stopped the fall. ANZ’s Head of Asia Research Khoon Goh says the market is worried about Indonesia’s Budget deficit.
China’s exports are still booming, despite all the noise about tariffs. China’s exports grew 6.6% overall in US dollar terms in December from a year ago, thanks to diversification of both export destinations and types of exports, says ANZ Greater China Economist Vicky Xiao Zhou.
Cheers,
Bernard.
Catch you tomorrow with an update on European Central Bank monetary policy this year.
