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Japans final manufacturing PMI for April was 55.1, down from 54.9 in the previous month.South Koreas exports continued to surge in April, driven by semiconductor shipments, demonstrating the resilience of the trade-dependent economy despite risks from the Middle East conflict. Semiconductor shipments, which account for about a quarter of the countrys total exports, surged, fueled by demand from global tech companies building artificial intelligence infrastructure. This result highlights how AI-related demand is helping the high-tech economy weather volatility associated with the Middle East conflict. Major memory chip makers such as Samsung Electronics and SK Hynix reported record first-quarter profits and are expected to continue setting records this year, despite soaring input costs due to the conflict in Iran. South Koreas Ministry of Trade, Industry and Energy said on Friday that exports rose 48.0% year-on-year in April to $85.89 billion, with Marchs growth revised to 49.2%. Imports rose 16.7% year-on-year to $62.11 billion, resulting in a trade surplus of $23.77 billion in April. Strong memory chip shipments continued to drive export growth, offsetting weaker performance in other categories such as automobiles and steel.Tesla (TSLA.O) updated its annual report on Thursday, stating that it earned over $500 million from sales to SpaceX and xAI. Tesla disclosed in January that its business dealings with xAI were approximately $430.1 million. Thursdays updated report shows that Tesla received an additional $143.3 million from SpaceX.Tokyo Electron shares rose 6%.A Reuters poll showed that 33 out of 30 economists expect the Reserve Bank of Australia (RBA) to raise the cash rate to 4.35% on May 5. More than a third of economists expect the RBA to raise rates to 4.60% or higher this year (no economists gave this expectation in the March survey).

As the BoJ ponders a YCC expansion, EUR/JPY continues to decline, falling below 142.60

Alina Haynes

Apr 06, 2023 11:52

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After plunging below 142.60 during the Asian trading session, the EUR/JPY pair's three-day losing trend was extended. Renewed rumors of an expansion of the Bank of Japan's (BoJ) Yield Curve Control (YCC) are exerting immense pressure on the cross.

 

The Japanese economy is experiencing gradual wage growth, and inflation is expected to respond to recent increases in crude oil prices. Analysts at Wells Fargo believe the BoJ will take advantage of a tactical opportunity to further modify its policy settings in the fourth quarter of 2022, and are inclined toward a meeting in October. They added that this timeframe is optimal for a smooth policy adjustment, as monetary easing from the Federal Reserve (Fed) and other major central banks should alleviate yield pressure.

 

In particular, the Bank of Japan (BoJ) will raise the target yield for 10-year Japanese government bonds (JGBs) from 0% to 0.25% and increase the tolerance interval surrounding this target to +/- 75 basis points.

 

Accelerating PMIs in the Eurozone provide support for the European Central Bank's sustained rate hikes. (ECB). S&P Global reported a Composite PMI of 53.7 on Wednesday, which was higher than the previous release of 52.0 but below expectations of 54.1, the highest level in the past ten months.

 

According to Reuters, S&P Global issued the following statement: "Manufacturing production increased slightly, but the service sector had the greatest impact on March's accelerated growth."

 

Wednesday, ECB policymaker Boris Vuji stated regarding interest rate forecasts, "The majority of the rate-hiking cycle has passed." He added, "We may require additional rate increases to address core inflation."

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