ForexLive Asia-Pacific FX news wrap: Japanese core inflation rose its fastest since 1981 | Forexlive

three main points of interest from the Asia-Pacific timezone today

  1. the
    latest Japanese CPI data, for December 2022
  2. a
    speech and subsequent Q&A from Federal Reserve Bank of New York
    President John Williams
  3. and
    the People’s Bank of China monthly setting of one- and five-year

headline and core (CPI excluding food) inflation both hit 4.0% y/y.
For core inflation that was its fastest rise in over four decades.
Japan’s core-core (CPI excluding food and
energy; this is the Japan measure closest to the US measure of core
inflation hit
3%, reaching a high last seen in July 2014. On
Wednesday this week we had the result of the latest Bank of Japan
monetary policy meeting, with no incremental change to the JGB
ceiling as was expected by some in the markets. The next BOJ meeting
is not until March 9 and 10, by which time we’ll have had January CPI
data results also. Thus today’s CPI was of interest, but not a
great deal. The yen did weaken. USD/JPY has risen to above 128.80 and
is just under there as I post. (And, as I proofread the post its getting another leg up to 128.90, making a liar out me …)

major FX has been relatively subdued, thus yen crosses are higher on
the session also.

NY Fed’s Williams spoke. There are three separate posts above
covering his speech and his two rounds of Q&A! Despite extensive
remarks, and unlike many, many other Federal Reserve officials we’ve
heard from, Williams did not give much of an indication at all of his
view on whether he supported a +25 or +50bp rate hike at the next
Federal Open Market Committee (FOMC) meeting coming on January
31/February 1.

China we had the regular monthly PBOC setting of one- and five-year
Loan Prime Rates. Given the MLF back on Monday was at an unchanged

was little expectation of any change to the LPRs. And thus, the rates indeed remained unchanged:

  • 3.65%
    for the one year
  • 4.30%
    for the five year

equity markets:

  • Japan’s
    Nikkei 225 +0.2%

  • China’s
    Shanghai Composite +0.5%

  • Hong
    Kong’s Hang Seng +0.95%

  • South
    Korea’s KOSPI +0.24%

  • Australia’s
    S&P/ASX 200 +0.15%

Note that the media ‘blackout’ period for Federal Reserve officials speaking publicly begins tomorrow, on Saturday, January 21.

  • The ‘blackout’ policy from the Federal Reserve limits the extent to which Federal Open Market Committee participants and staff can speak publicly or grant interviews.
  • The period begins the two Saturday’s preceding a Federal Open Market Committee (FOMC) meeting and ends the Thursday following.

Ahead of that are two Fed speakers later today – Harker and Waller.

Also note that China will be out on holiday all next week for Lunar New Year celebrations, welcoming in The Year of the Rabbit. To all of those taking a break for this – enjoy!

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