There was no fresh US debt limit news during the US session, so with Asian stocks opening on Monday without bank holidays and no good news today we saw a decline in Asian equity bourses.
Most of the majors remained subdued against the US dollar currency this morning, with the EURUSD pair testing around the 1.0700 mark and GBPUSD around the 1.2350 area.
We saw the USDJPY pair far from the highs of 140.50 early on to briefly move under 140.00. News flow was limited but with remarks from Japan’s finance minister Suzuki and also from Bank of Japan Governor Ueda.
Japan’s jobless rate also fell to 2.6% in April from 2.8% in the previous month, government data showed on Tuesday, which helped with the drop under 140.00.
The seasonally adjusted unemployment rate was below economists’ median forecast of 2.7%. Breaking down the commentary from Japanese Finance Minister Suzuki, he noted that he must guide fiscal policy in line with international norms.
Suzuki also said his Ministry of Finance’s fiscal panel calls for maintaining yen credibility in guiding fiscal policy and that economic fundamentals that have backed the yen’s credibility are no longer considered absolute and that policymakers must strive to maintain credibility in the currency.
Bank of Japan Governor Ueda was speaking in parliament and no doubt trying to jawbone down the USDJPY pair. The crux of the speech was inflation and he not that Japan has not reached sustainable 2% inflation.
Ueda also said that “inflation to slow a great deal around the middle of fiscal year 2023, likely to rebound after this but uncertainty is high, and the central bank will patiently maintain easy monetary policy as there is still distance to go to stable 2% inflation.
Notably, he said the BOJ will continue with bond buying operations. Nothing revolutionary here, but the market is clearly expecting softer intervention as the USDJPY pair teeter around the 140.00 handle.
