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USD/JPY Spike Spills Over, But USD/Asia Pairs Down From Highs

ASIA FX

USD/Asia pairs are mostly higher, with some spill over from the spike in USD/JPY post the BoJ. However, moves haven't been uniform, with IDR a notable outperformer and bucking the recent trend of firmer correlations with yen moves. The meeting between China Vice Premier Liu He and US Treasury Secretary Janet Yellen later today will be in focus. Tomorrow both BI and BNM policy decisions are due, with +25bps expected from both central banks.

  • USD/CNH continues to trade with a firmer bias, although outside of USD/JPY spill over, profit taking ahead of LNY next week could be a factor. We saw selling interest emerge ahead of the 6.7900 level, with the pair last sub 6.7800.
  • 1 month USD/KRW got to a high of 1245.40 post the BoJ, before selling interest emerged. This still leaves us within recent ranges though. The pair is back to the low 1240 region now. Weaker onshore equities have likely weighed at the margins today as well.
  • USD/IDR edged up post BoJ, but found selling interest not long after. Spot got close to 15200 but we are now back close to 15100, around 0.50% firmer in IDR terms for the session. We highlighted earlier the stronger correlation between USD/IDR and USD/JPY over the past month, but this trend clearly hasn't been evident post the BoJ outcome today. Lows m the start of the week in USD/IDR come in just under 15000. BI is forecast to hike by another 25bps tomorrow.
  • USD/MYR spiked towards 4.3400 in early trade but is now back to 4.3330. Trade figures for Dec, showed export and import growth slowing more than expected, export growth back to 6.0% y/y, from 15.1%, while imports were +12.0% y/y, from 15.6%. The trade surplus remained healthy though at MYR27.76bn and above expectations. BNM is expected to hike by 25bps tomorrow.
  • Elsewhere, THB and PHP have outperformed against the SGD. USD/SGD is back towards 1.3240, seeing some spill over from higher USD/JPY levels. USD/THB is near 33.12, only slightly up for the session, while USD/PHP is down sub 54.80.
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