ForexLive Asia-Pacific FX News Brief: Yellen greenlights USD/JPY higher


  • The S&P 500 has risen in the year after every midterm election since World War II.
  • Fed Speakers Coming Soon Wednesday Oct 12, 2022 – Kashkari, Barr, Bowman
  • JP Morgan forecast the upper band of the Fed’s target range at 4.75% and will remain there until 2023
  • Speakers from the Bank of England on the program for Wednesday 12 October 2022: Haskel, Pill, Mann
  • Japan Chief Cabinet Secretary Matsuno: Will take appropriate action on excessive currency movements
  • Japan machinery orders fell the most in 6 months – summary (ps USD/JPY still rising)
  • US allows at least 2 non-Chinese chipmakers in China to receive restricted products and support
  • PBOC sets benchmark USD/CNY rate for today at 7.1103 (vs. estimate at 7.1236)
  • US President Biden says he doesn’t expect a recession, but it’s possible
  • Japan fin min Suzuki: ‘no change’ in stance, still watching FX moves with sense of urgency
  • The Bank of Korea raised its key base interest rate to 3.00%, from 2.50%, and as expected
  • US CPI data is due out on Thursday, preview. “I’d be surprised if the core was 0.6% or higher”
  • USD/JPY rises… rises… above 146.00
  • ICYMI: New Bank Lending In China Nearly Doubled In September From August
  • Japan Data – Machinery Orders -5.8% m/m in August (-2.3% expected)
  • Japan’s manufacturer confidence fell again in October (Reuters Tankan survey)
  • Fed Mester: Fed Needs to Hike Rates More Because Inflation Hasn’t Slowed
  • RBA Ellis says policy is no longer expansive
  • Reports that Intel plans to cut thousands of jobs
  • RBA Ellis says Australia’s implied neutral rate is at least 2.5%
  • It looks like the White House is softening us up for a high CPI number on Thursday.
  • Villeroy of the ECB: the debate on +50 bps or +75 in October is premature in such volatile markets
  • Goldman Sachs revises CAD, AUD and NZD forecasts down, but acknowledges risk of upside risk
  • Trade Ideas Thread – Wednesday, October 12, 2022
  • More from US Treas Sec Yellen: Looking at UK developments, there is still work to be done on inflation
  • IMF chief economist says central bank fight against inflation will continue well into 2024
  • US Treasury Secretary Yellen Says USD Level Is a Logical Outcome of Policy
  • Asia Economic Calendar – Wednesday 12th October 2022 – RBA Speaker (Ellis)
  • Yellen says we are starting to see some signs of easing of pressure in the job market
  • Forexlive Americas FX News Roundup: BOE’s Bailey Throws Down the Gauntlet
  • Broader US stock indices close lower. The Dow Industrial Average breaks a 4-day losing streak

US Treasury Secretary Yellen spoke in a US TV interview, CNBC, covering a wide range of topics. However, it was her comments on the USD that set USD/JPY on fire. In the post here:

The short version of the long story is that Yellen hit cold water by talking about coordinated global currency intervention.

USD/JPY took its time, until Tokyo started, but finally traded up to 146.00, its highest level since August 1998. As I update, the pair has broken above 146.30. We had verbal intervention from the Japanese authorities during morning trading, but nothing convincing at all. See previous yen-related posts for links to previous posts on what to watch when real intervention is imminent.

The unlucky GBP traded lower on the session after Bank of England Governor Bailey cut legs short and gilts on Tuesday:

Regional stocks here fell again. China and Hong Kong were lower, while Japan’s Nikkei was also lower, but only (as I update).

On the central bank front, we had a speech from Luci Ellis, Assistant Governor (Economic) of the Reserve Bank of Australia. The Bank of Korea raised its base rate by 50 bps to 3%, in an expected move.

US President Biden spoke in an interview with US media saying that he did not expect a recession, but if there were, it would be mild. This is code because a recession is on the way and it could be nasty.


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