Asia session: yen slips to 157.80 despite Japan’s FX warning
The yen slipped further despite a verbal intervention warning from Japan's finance minister, while Asian equities rose on strong South Korean growth and Chinese industrial profit data.
USD/JPY rose 0.22% to 157.80 [P] in the Asia session, extending its climb even after Japanese Finance Minister Satsuki Katayama said Tokyo was prepared to take decisive steps in the FX market, with the pair already trading near 157.70 at the time of her comments [1]. The pair pushed higher regardless, suggesting markets did not treat the verbal warning as an immediate deterrent. Katayama said authorities were watching the yen with heightened urgency and wanted it to reflect economic fundamentals [1]. Gold fell 0.49% to $4,013.1 [P], consistent with reporting that a broadly stronger US dollar kept the metal under pressure near $4,000 ahead of Wednesday’s FOMC decision, with markets pricing over an 80% chance of another rate hike in December [2].
The Nikkei 225 gained 1.12% to 63,268 [P], tracking a region-wide lift in sentiment. South Korea’s economy grew 1.0% quarter-on-quarter in the third quarter, beating the 0.7% consensus and accelerating from 0.6% in the prior quarter, with annual growth of 3.4% also topping forecasts [3]. Semiconductor exports and capital spending drove the surprise, with the Bank of Korea noting chips contributed close to half of quarterly growth [3]; the KOSPI’s jump triggered a sidecar trading suspension [3]. China’s industrial profits rose 14.4% year-on-year in September, rebounding sharply from 4.2% in August, with nine-month cumulative growth at 15.5% [4]. Against this, Morgan Stanley warned Chinese equities could fall a further 10-15% after the CSI 300 entered a bear market [5], and HSBC shares dropped over 5% despite a third-quarter pre-tax profit of $9.6 billion and a new $1 billion buy-back, as net interest income missed estimates by $2.6 billion [6].
AUD/USD was little changed, up 0.03% to 0.7021 [P], while S&P 500 futures edged down 0.09% to 7,708.0 [P]. Brent crude fell to $114.85 a barrel and WTI to $100.87, pulling back from last week’s peaks as diplomatic visits to Iran raised hopes of de-escalation, though a CNN report said US forces could strike Iran within 96 hours of an order from President Trump [7].
Sources: [P] Prices: Yahoo Finance 5-minute bars, session open to close; calculated by Praevis; [1] FXStreet; [2] FXStreet; [3] Investing.com (economy); [4] investingLive; [5] SCMP Business; [6] SCMP Business; [7] OilPrice.com