ForexLive Asia-Pacific FX news wrap: BOJ: loose policy still needed. HK stocks pullback.

• Asia market FX intervention
• Global Rate-Cutting Cycle Shift in September: What Comes Next?
• Nomura urge a ‘more sober assessment’ on China stimulus rally
• Vanishing town highlights the challenges faced by famous son, Bank of Japan Governor Ueda
• USD/JPY off its highs after the latest headline out of Japan
• Japan PM Ishiba didn’t request any special policy from BOJ Gov Ueda at Wednesday meeting
• BOJ’s Noguchi says must patiently maintain loose monetary conditions
• Australian August trade surplus larger than expected
• Brent crude oil off its highs in Asia, holding above USD74 – attack on Iran cocnerns
• FX option expiries for 2 October 10am New York cut
• Japan’s stock market rebounding strongly on dovish Ishiba
• Japan Jibun Bank September Services PMI (final): 53.1 (prior was 53.7)
• Wednesday marked one of the largest daily USDJPY pip returns in FX history
• New Zealand September commodity price index +1.8% m/m (prior +2.1%)
• Federal Reserve rate cuts under threat from US port strike
• RBNZ preview – most likely cut the cash rate by 50bps next week, and again in November
• Australian (final) services PMI for September 50.5 (prior 52.5)
• Here’s a forecast for USD/JPY back to 150 – stick a fork in the BOJ, they’re (nearly) done
• GBP forecasts: EUR/GBP to 0.85 but GBP/USD to 1.3530
• 100bp of rate cuts coming up from the Reserve Bank of New Zealand, beginning next week
• The big reason that’ll make the European Central Bank cut rates to as low as 1%
• Forexlive Americas FX news wrap 2 Oct: JPY moves sharply lower as rate hikes off table
• Barclays are expecting the European Central Bank to cut more than expected
• US major indices close marginally higher
• Trade ideas thread – Thursday, 3 October, insightful charts, technical analysis, ideas

Bank
of Japan board member Asahi Noguchi spoke to business leaders in
Nagasaki. Saying he sees a need for the Bank to maintain loose
monetary policy stance given its going to take time to exit
deflation:

• “It
  will likely take considerable time for a mindset that is consistent
  with the 2% price stability target to be established among the
  society,”
• “Until
  then, I believe it is most important to continue to patiently
  maintain accommodative financial conditions.”

Noguchi
was conveying a very similar message to Prime Minister Ishiba on
Wednesday:

• “I
  don’t believe we are in an environment that requires an additional
  rate increase”

Lest
we conclude that the Bank of Japan is subject to political pressure,
Japan’s Chief Cabinet Secretary Hayashi weighed in by saying PM
Ishiba didn’t request any specific monetary
policy of BOJ governor Ueda when they met on Wednesday. Huh. I imagine Ueda got to his
exalted position by managing to read between the lines over his
career though. And, lest you think I am singling out the BoJ as being ’emotionally intelligent’ with regards to politics, imagine if the Fed cut rates by 50bp going into an election! Oh, wait …

USD/JPY
carried on its Wednesday rally to highs just over 147.20 before
falling back under 147.00. Elsewhere across major FX the USD added
points, although ranges were subdued. US nonfarm payroll data are due
on Friday and will soon come into focus.

While
BOJ and yen developments are a focus, so too are Chinese markets and
stimulus. China remains on holiday, but Hong Kong is trading. The
benchmark Hang Seng index pulled back today. As I post is off around
4% on the day. Which barely scratches the surface of its epic rise
since stimulus announcements last week.

This article was written by Eamonn Sheridan at www.forexlive.com.