October 1, 2023

had a sharp fall in very early Asia, dropping
from circa
139.50 to lows under 138.90. The swings didn’t finish there, with
lows for the session (as I write) under 138.75 before a move back up
to above 139.50. Speculation swirled of a Bank of Japan ‘tweak’
to its yield curve control program. Yen liquidity remains thinner
than usual as traders in the region we await the announcement. The
longer the wait is for the announcement the more likely it is that
the Bank has made some sort of tweak or policy change.

Tokyo core-core CPI for June rose above 4%, confirming solid underlying inflation pressure. Yield on the 10 year Japanese Government Bond rose above 0.5%, which is the upper limit of the bopjj tolerance band (zero +/- 50bp).

excluded, moves elsewhere across major forex rates were not nearly so

equity markets:

  • Japan’s
    Nikkei 225 -1.3%

  • China’s
    Shanghai Composite 0%

  • Hong
    Kong’s Hang Seng -0.5%

  • South
    Korea’s KOSPI -0.4%

  • Australia’s
    S&P/ASX 200 -1%

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