ForexLive Asia-Pacific FX news wrap: Solid Japan wage data, yen surges higher

• Federal Reserve speakers on Wednesday include Barkin, Goolsbee, Bowman, and Jefferson
• Japan’s Akazawa says ambitious goal to boost minimum wage, eradicate deflationary mindset
• BOJ official: BOJ sees underlying inflation gradually heading towards 2%
• The additional US tariffs of 10% will apply to Hong Kong as well as mainland China
• FX option expiries for 5 February 10am New York cut
• European Central Bank chief economist Philip Lane is speaking today
• Yen traders note – BoJ hawk Naoki Tamura is scheduled to speak on Thursday
• Japan: robust wage growth bolsters case for Bank of Japan rate hikes – as early as May
• US Postal Service suspends packages from China and Hong Kong until further notice
• China January Caixin Services PMI 51.0 (vs. 52.2 in December)
• US Central Intelligence Agency offered buyouts to its entire workforce on Tuesday
• The People’s Bank of China has set the CNY at its strongest since November 8 last year
• PBOC sets USD/ CNY reference rate for today at 7.1693 (vs. estimate at 7.2661)
• BoJ likely to raise ratees higher than most expects says former official Hideo Hayakawa
• New Zealand data – ANZ World Commodity Price Index +1.8% m/m in January (prior +0.1%)
• Japan January services PMI 53.0 (prior 50.9)
• Fed’s Jefferson says there is no need to hurry further rate cuts
• ANZ says NZ jobs data don’t stand in the way of RBNZ 50bp cut at meeting on 19 February
• Trump says tomorrow more hostages will be released
• Trump says US ‘will take over the Gaza Strip’
• Japan headline wages +4.8% y/y in December, real wages rise also
• More on the New Zealand jobs data – unemployment hitting a 4 year high
• More on Goldman Sachs – China retaliatory measures to have limited impact on energy prices
• Australian (final) January Services PMI 51.2 (prior 50.8)
• Goldman Sachs – China trade war retaliation measures to have a limited energy price impact
• Japan’s Honda and Nissan may call off merger talks
• New Zealand Q4 unemployment rate 5.1% (vs. 5.1% expected and 4.8% in Q3
• Oil – private survey of inventory shows a headline crude oil build larger than expected
• Forexlive Americas FX news wrap: US dollar slumps as the trade war dust settles
• US indices close higher on the day led by the Nasdaq/Russell 2000
• Trade ideas thread – Wednesday, 5 February, insightful charts, technical analysis, ideas

Wage
data from Japan today moved solidly higher, bolstering the prospect
of a Bank of Japan interest rate hike in the near term. May is
firming up for the next rise, hosting the yen.
USD/JPY moved more than a big figure lower, toward 153.00, with yen
crosses dropping alongside.

Further
from Japan, we had:

• former
  Bank of Japan executive Hideo Hayakawa Bank of Japan saying rates are going
  to move higher than the market expects,
• Bank
  of Japan Policy Head Kazuhiro Masaki indicated further rate hikes as
  underlying inflation accelerated towards the Bank’s 2% goal,
• economy
  minister Akazawa spoke of further efforts to boost wages and
  eliminate Japan’s deflationary mindset.

China
returned from its long holiday today. The People’s Bank of China
continued to support the yuan, setting the USD/CNY reference rate
well below 7.2 again. Traders were not convinced, though, taking CNY
weaker towards the top end of the USD/CNY permitted trading band. We
had further US tightening of import restrictions:

• US
  Customs said the additional US tariffs of 10% will apply to Hong Kong
  as well as mainland China,
• The
  US Postal Service will temporarily suspend international package
  acceptance of inbound parcels from China and Hong Kong Posts until
  further notice. If you are confused by this, alongside the added 10%
  tariff, the White House announced the end of the century-old de
  minimis exemption, which had allowed packages valued under $800 to
  enter the US without duties. This exemption had fueled the rapid
  growth of Chinese discount retailers like Shein and Temu, enabling
  them to ship a wide range of low-cost products, one package at a
  time. That’s been halted.

Chinese
equities fell.

From
New Zealand today we had Q4 employment data showing rising
unemployment and a net loss of jobs in the economy. The Reserve Bank
of New Zealand next meet on February 19 and the data today keeps the Bank on track
for a 50bp interest rate cut.

Apart
from the yen moves major FX was bound in small ranges.

As
a note on Japanese equities, reports were that Japan’s Nissan may
call off its merger talks with Honda, according to a person familiar
with the matter.

In
Middle East news, Trump said the US will take over the Gaza Strip.

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