ForexLive Asia-Pacific FX news wrap: Bank of Japan Governor Ueda spoke (a lot)

Bank of Japan Governor Ueda spoke:

• Bank of Japan Governor Ueda again – If prices overshoot will take stronger steps
• BoJ Gov Ueda again: If food inflation is temporary, shouldn’t respond with monetary policy
• Bank Japan Governor Ueda says cost-push inflation factors likely to gradually dissipate
• Bank of Japan Governor Ueda says expects underlying inflation to accelerate gradually

Other:

• Federal Reserve speakers Wednesday include Kashkari and Musalem
• ICYMI – Goldman Sachs lowered its Global AI Server shipment volume forecast
• ECB’s Villeroy speaks on the economy Wednesday, while Cipollone speaks on crypto
• More from Trump on tariffs – Not many exceptions to April 2 tariffs
• Trump may implement copper tariffs within weeks
• PBOC sets USD/ CNY central rate at 7.1754 (vs. estimate at 7.2559)
• Australian monthly CPI (February 2025) 2.4% y/y (vs. 2.5% expected)
• Canada could be on the lower end of Trump’s tariffs – report
• Japan Services Producer Price Index (February 2025) +3% y/y (exp +3.1%)
• Moody’s warns US fiscal strength is eroding amid rising debt costs and policy risks
• Chile Magnitude 6 earthquake
• Morgan Stanley upgrades China equities – both mainland and Hong Kong
• Heads up for Trump speaking soon – at 2100 US Eastern time (0100 GMT)
• Rabobank predicts EUR/USD rise to 1.12 in one-year outlook
• Forexlive Americas FX news wrap 25 Mar: US data weaker. Dollar mostly lower but off lows
• S&P analysts says the US economic outlook sees growth losing steam amid shifting policies
• Oil – private survey of inventory shows a headline crude oil draw larger than expected
• GameStop to invest corporate cash in bitcoin
• UBS sees S&P 500 falling to 5,300 as consumer fatigue bites
• Goldman Sachs warns of potential tariff shock on April 2
• Trade ideas thread – Wednesday, 26 March, insightful charts, technical analysis, ideas

Bank
of Japan Governor Ueda spoke at length today. If you want a one-word
summary mine would be ‘dovish’. Or at least ‘not hawkish’ (the two
word summary).

Ueda
spoke broadly, and in a mainly balanced fashion, but for every
indication he gave that the Bank will be raising rates he provided
caveats as to why they would not be doing so any time soon. In essence his message is that if
BoJ forecasts for the economy and prices come to fruition then the
Bank will adjust monetary policy (raise rates), but that he is not
expecting this quickly.

For
the equity folks, Ueda gave no indication of any hurry to sell off the
bank’s ETFs holdings.

I’ve
grouped the posts on Ueda all together in the points above, if you
want to go through them.

The
yen fell during the session against the USD and other major FX.

From
Australia we had February CPI data. The monthly CPI data is not the
official guide to inflation in Australia, that’ll have to wait for
the quarterly reading due in late April. Having got that out of the
way, February CPI came in at 2.4%, under the median estimate of 2.5%,
under January’s 2.5%, and under the mid-point of the Reserve Bank
of Australia’s 2 – 3% target band. A good report. The RBA meet next week, March
31 and April 1. What to expect? I suspect:

• 1. Given how hawkish they sounded in their
  February meeting,
• and 2. that today’s inflation data was not an
  official quarterly read,

a rate cut would be a surprise.

Trump
spoke in an interview, sending out mixed messages on what’s to come
on April 2 re tariffs:

• Not
  many exceptions to April 2 tariffs
• All
  we are doing is reciprocal
• I’ll
  likely be more lenient than reciprocal

On
balance these seem to indicate a dialling back of the threat, but
less cryptic would be helpful to folks trying to make
business decisions surrounding tariff and economic policy. Still,
he’s the Prez so I guess he knows what he is doing.

The
USD was not a lot changed on the session (yen excepted).

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