Firmer Yen, China Property Support Talks Buoy Asian FX

USD/Asia pairs are lower across the board, aided by fresh China policy stimulus/support hopes and a broader pull back in USD sentiment, which has been led by USD/JPY. Regional equity sentiment is mostly positive as well. USD/CNH is back close to 7.2000, while spot USD/KRW is down 1%. THB and PHP have also rallied strongly, both up 0.80%. Tomorrow, we get South Korea unemployment and bank lending, while India CPI and IP figures are due, along with Malaysian IP. China aggregate credit figures are also still yet to print.

• USD/CNH has sunk more than 350pips from intra-day highs above 7.2360 to fresh lows sub 7.2000. We sit slightly higher now, last around 7.2050/60, still 0.30% stronger in CNH terms for the session. Onshore China media has been dominated by further calls for policy support, particularly for the property sector. The MNI Policy team notes China may relax property related restrictions in H2. Still, China property related shares have struggled to stay in positive territory so far today.
• 1 month USD/KRW got to fresh lows near 1288, but sits slightly higher now around 1292, still +0.40% higher for the won so far in Tuesday trade. Lower USD/JPY levels have helped the pair, while onshore equities are +1.3% higher, with offshore investors adding $283.4mn to local shares.
• The SGD NEER (per Goldman Sachs estimates) has retreated from its highest level since 13 June, printed in early dealing to sit a touch softer. We now sit ~0.5% below the upper end of the band. The pair has fallen a further ~0.1% today and now sits below the 20- and 200-Day EMAs, printing the lowest level since 22 June. A reminder that the only data of note this week is Fridays Advance Q2 GDP print, a fall of 0.2% Q/Q is expected.
• Broader USD/Asia flows are dominating in early trade as the Rupee firms in early dealing. USD/INR is ~0.2% lower, last printing at 82.35/40. The pair remains well within the monthly range. In a blow to India's chip making plans Foxconn has withdrawn from its semiconductor JV worth $19.5bn with Indian firm Vedanta. The domestic data docket is empty today. Tomorrow June CPI and May Industrial Production cross.
• USD/PHP has sunk back to 55.25/30, around 0.75% firmer in PHP terms versus yesterday's closing level. May trade data showed exports and imports better than expected, but the trade deficit wasn't too far off last month's levels, printing at -$4.396bn (prior -$4.843bn). For USD/PHP recent lows near 55.00 aren't too far away.
• USD/THB has slumped back through 34.90, also tracking close to July to date lows.