At a look:
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FX ranges subdued regardless of heavy macro and geopolitical information movement
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Japan wages and JGB public sale spotlight long-end stress
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RBA pushes again firmly on rate-cut expectations
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South Korea and China coverage indicators intention to stabilise markets
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Geopolitics add to danger premium, however not but disorderly
Market overview:
Main FX pairs traded in slender, subdued ranges regardless of a busy session for macro knowledge and coverage headlines throughout the Asia-Pacific area. Markets appeared content material to soak up developments with out chasing momentum, with positioning cautious forward of upcoming world knowledge and central-bank occasions.
Japan: wages and bonds in focus:
Japan’s actual wages fell 2.8% y/y in November, the sharpest decline since January, as a plunge in bonus funds mixed with still-elevated inflation continued to erode family buying energy. The info underscore the continued problem for the BOJ: tightening coverage into an atmosphere the place actual incomes stay beneath stress.
Bond markets echoed that pressure. Japan’s 30-year JGB public sale noticed weaker demand, with the bid-to-cover ratio dropping to three.14 from 4.04, whereas the tail widened to 0.15. The best accepted yield printed at 3.457%, preserving stress on the super-long finish and reinforcing curve-steepening dangers.
Japanese equities prolonged losses, with the Nikkei sliding for a second day amid profit-taking in AI-related names. The index additionally fell beneath the 52,000 degree as commerce frictions with China resurfaced, together with Beijing’s anti-dumping probe into Japan’s dichlorosilane imports — a key semiconductor enter.
Australia: commerce knowledge and agency RBA messaging:
Australia’s items commerce surplus narrowed sharply in November, falling to A$2.94bn from A$4.35bn, properly beneath expectations. Exports dropped 2.9%, led by a 9% fall in iron ore, whereas imports edged 0.2% increased.
On coverage, RBA Deputy Governor Andrew Hauser bolstered a agency stance, saying November CPI was “largely as anticipated” and that inflation above 3% stays too excessive. He reiterated that Australians have seemingly seen the final charge minimize of this cycle, leaving February hike danger alive. The messaging supported front-end yields and helped restrict draw back stress on the Australian greenback.
Korea:
South Korea’s finance ministry warned FX volatility is elevated, mentioned gained strikes are disconnected from fundamentals, and pledged swift stabilisation measures if wanted. Officers additionally flagged steps to encourage funding into native equities.
China and geopolitics
China-related danger sentiment remained blended. Chinese language markets have been uneven, with Hong Kong pressured by tech weak spot, whereas the mainland discovered assist from a CNY 1.1tn PBoC reverse repo operation geared toward sustaining ample liquidity.
Geopolitically, studies alleging Chinese language cyber intrusions into U.S. congressional employees emails added one other layer of U.S.–China pressure, reinforcing uncertainty round tech controls, defence coverage and capital flows. The impression on markets was contained for now, however the tone stays a drag on China-linked danger belongings and Asia FX.
Asia-Pac
shares:
- Japan
(Nikkei 225) -1.2% - Hong
Kong (Hold Seng) -1.25% - Shanghai
Composite +0.1% - Australia
(S&P/ASX 200) +0.2%
