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On January 7th, reports surfaced that Honda would extend its production halt in China by two weeks, with production scheduled to resume on January 19th. On the same day, Honda China and GAC Honda responded, stating that after considering factors such as semiconductor supply and production line upgrades, GAC Honda decided to adjust its production schedule for January 2026, extending the production halt for another two weeks. Honda China and GAC Honda further stated that the impact of this short-term production adjustment is relatively controllable, and the expected recovery of lost production throughout the year will not affect product deliveries to customers. GAC Honda will adjust its production schedule accordingly and prepare for the entire years production plan.January 7th - Traders were not particularly panicked by the US military intervention in Venezuela and the threat of further military action in the region, but they remained closely watching the events subsequent impact on the oil market. US President Trump stated that Venezuela would "deliver" up to 50 million barrels of oil to the US, which would be sold at market prices. This statement led to a further decline in oil prices. However, a senior foreign exchange analyst at MUFG Financial Group stated that the expectation of near-term pressure on oil prices "often bodes well for emerging Asia," as most economies in the region are net oil importers.Germanys seasonally adjusted unemployment figures and unemployment rate for December will be released in ten minutes.Bernstein: Lowered its target price for LOréal from €410 to €405.January 7th - The Canadian dollar fell to a four-week low against the US dollar, and the Norwegian krone also weakened, influenced by falling oil prices. This followed US President Trumps announcement that Venezuela would transfer up to 50 million barrels of sanctioned crude oil to the US. Trump stated that this oil would be sold at market prices, and he would personally control the related funds to ensure it benefited both the US and Venezuela. This came after the US launched military action over the weekend aimed at expelling Venezuelan President Nicolás Maduro.

Even as the BoJ vs. Fed Difference Remains in the Spotlight, USD/JPY Tracks Below 134.00 on Lackluster Yields

Alina Haynes

Apr 17, 2023 14:02

USD:JPY.png 

 

As Monday begins in Tokyo, USD/JPY falls from its intraday high and stabilizes around 133.80. As a consequence, the Yen pair is unable to extend its previous day's gains due to lax market conditions preceding this week's key data/events. In addition to a paucity of significant data or events, USD/JPY traders have recently struggled with inconsistent triggers and sluggish returns.

 

The previous day, USD/JPY reached its highest level in a week as primarily positive US data dampened expectations for a policy shift and rate cut by the Federal Reserve (Fed) in 2023. Despite this, US retail sales decreased by 1.0% in March compared to the predicted -0.4% decline and February's -0.2% decline. As opposed to the 0.2% market consensus and previous reading, Industrial Production increased by 0.4% in the month in question. The preliminary result of the University of Michigan's (UoM) Consumer Confidence Index for April, which increased to 63.5 from 62.0 analysts' expectations and previous readings, was also encouraging. In addition, inflation forecasts for the next year increased from 3.6% in March to 4.6% in April, while inflation forecasts for the next five years decreased by 2.9% during the same month.

 

Previously, the USD/JPY pair increased due to hawkish Fed discussions. In an interview with Reuters on Friday, Raphael Bostic, president of the Atlanta Federal Reserve (Fed), stated that "recent developments are consistent with one more rate hike." According to Reuters, Fed Governor Christopher Waller discussed this topic and stated that additional rate hikes are necessary because the Fed has not made significant progress toward its inflation objective. In an interview with CNBC on Friday, Austan Goolsbee, president of the Federal Reserve Bank of Chicago, stated that he still needs to examine the statistics. The lawmaker said, "However, let's keep in mind that we've raised a lot of money; some of the delay may be reflected in today's retail sales number."

 

In contrast, the USD/JPY pair was able to maintain its strength due to the new Governor of the Bank of Japan (BoJ), Kazuo Ueda, who supports the Japanese central bank's easy-money policy.

 

Recent geopolitical tensions between China and the United States over Taiwan, as well as China's desire to collaborate with Russia to enhance regional and global security, have weighed on the USD/JPY pair and agitated the market.

 

S&P 500 Futures struggle to find a clear direction amidst these wagers following Wall Street's pessimistic close, as bond yields remain neutral despite weekly gains.

 

The preliminary readings of the US PMIs for April and the Japanese National Consumer Price Index (CPI) for March will be crucial to monitor going forward. The previously mentioned risk factors and central banker comments are also significant.


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