- US indices ended Friday's session slightly higher, capping the declines recorded throughout last week. The benchmark Nasdaq of technology companies gained just 0.09% on the day, while the S&P500 alone added 0.14%. The best performer on the day was the Dow Jones, which gained 0.22%.
- The mood of Asia-Pacific markets during today's session is mixed, with the Nikkei losing 0.60%, the Kospi gaining 0.25%, the Nifty 50 rising 0.60% and the S&P/ASX 200 gaining 0.22%. The Hang Seng lost 1.05%.
- European index futures point to a higher opening of the session on the Old Continent.
- Investors' attention is focused on the Japanese yen today, where Ueda's comments led to the biggest intraday drop on the USDJPY pair in nearly 2 months.
- Bank of Japan Governor Ueda commented over the weekend that he was focusing on a "quiet exit" limiting monetary easing.
- Ueda said he believes it is possible that the BOJ will have enough information by the end of 2023 to assess whether wages will continue to rise, a condition for limiting monetary stimulus.
- In reaction to these comments shortly after the FX market opened, the USDJPY pair is under clear selling pressure, thus descending to the 146.10 zones (-0.5% on a daily basis). Japanese 10-year bond yields rose to the highest levels recorded since 2014.
- In response, the dollar is losing against all major world currencies, while the previously mentioned yen and Australian dollar remain strong.
- August inflation in China: CPI 0.1% y/y (expected 0.2%) and PPI -3.0% y/y (expected -3.0%). The yuan is gaining against the USD after, the PBoC decided to set the pair's benchmark rate much lower than expected. Moreover, over the weekend the government allowed insurance companies to buy more shares, reinforcing the effect of the stimulus processes.
- A strike by Australian workers continues to limit LNG production, US gas quotes however, losing more than 2% early in the session.
- US Treasury Secretary Janet Yellen has said she is confident of a soft landing for the US economy. moreover, the WSJ's Nick Timiraos believes that the Fed will not decide on a hike at its September meeting and will give more serious thought to whether one will still be needed.
Following Ueda's comments, the USDJPY pair is testing the minima quoted last week. Source: xStation 5
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