The Australian dollar is the driver of the session. It fell sharply after the release of disappointing labor market data for the month of April. Jobs shrank in the economy while the unemployment rate jumped higher. I should add that unemployment is still near its lowest levels. However, today’s data as well as yesterday’s weak wage data, combined with other indicators showing some strength coming from the Australian economy should give the RBA enough reason to pause at its next meeting on June 6th.
The USD/JPY fell during the session. The “chatter” continues to change course by leaps and bounds at the Bank of Japan. While policy tightening still seems some time away a step towards that, i.e. the central bank’s higher expectations for growth, CPI and other indices seem likely. The yen added some tics during the session, as USD/JPY fell from highs around 137.70 to below 137.40 at one point. Not a huge range.
Today’s Japanese trade data was disappointing. April numbers showed:
- Imports fell faster than expected, and to their first year-over-year decline in 27 months
- Exports rose 2.6% year-on-year, missing the 3.0% increase expected by economists, and the slowest pace since February 2021.
New Zealand released its government budget. The Treasury no longer expects a recession in the country.
The People’s Bank of China has set the USD/CNY reference rate within 7 hairs today. This is the weakest average rate of the local yuan since December 8th last year.
Asian stock markets:
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Japan’s Nikkei 225 +1.5%, adding to its excellent rally
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China Shanghai Composite +0.5%
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Hang Seng in Hong Kong +1.2%
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Kosby in South Korea +0.55%
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Australia S&P/ASX 200 +0.55%
AUD/JPY lowered on both legs but rebounded somewhat: