ForexLive Asia-Pacific FX news wrap: Tokyo inflation jumps in March

• Federal Reserve speakers on Friday include Barr and Bostic
• Chinese President Xi Jinping met with global CEOs in Beijing on Friday
• China unveiled a plan to enhance the sustainability of its aluminum industry by 2027
• European Central Bank board member Luis de Guindos speaking Friday
• US inflation (PCE) data due Friday – critical ranges to watch – clustered around +0.3% m/m
• Goldman Sachs moves its RBA rate cut forecast from April to May
• Gold made a new high above US$3060 earlier, now its above $3070
• Canada – Carney and Trump are expected to speak on Friday
• Trump warned US automakers not to raise prices due to tariffs
• PBOC sets USD/ CNY mid-point today at 7.1752 (vs. estimate at 7.2591)
• Stronger Tokyo inflation data bolsters case for May BoJ rate hike, says ING
• Poll shows expectations are for the Reserve Bank of Australia to stay on hold next week
• BOJ Summary of Opinions – March meeting
• The yen has strengthened after the trifecta of Tokyo CPI data – inflation rising
• Tokyo February headline CPI +2.9% y/y (2.7% expected)
• Morgan Stanley data preview – sees hotter core PCE print
• Barclays are expecting the People’s Bank of China to cut the value of the yuan
• Fed’s Barkin warns not assume just a one-time change in prices from tariffs
• Wells Fargo warns of downside risks for Mexican peso amid tariff threats
• JPMorgan sees limited downside for S&P 500 despite modest overvaluation – fair value 5400
• Euro poised to strengthen as diverging US–EU policy paths reshape outlook: EURUSD forecast
• Confirmed – Australian national election will be on May 3
• New Zealand March consumer confidence 93.2 (prior 96.6)
• Forexlive Americas FX news wrap: Gold hits a record in the tariff fallout
• Fed’s Collins says inflation risks are to the upside
• Fed’s Barkin says current monetary policy setting ‘good place to be’

We
had inflation data for Tokyo for March today, with another rise
recorded. All three of the measures came in above expected, all of
them above (or equal to in the case of the headline) the February
reading, and all three also above the Bank of Japan 2% target.

At
the margin, the data is another argument for a nearer-term Bank of
Japan rate rise. Both services and goods prices are seeing rising
inflation pressures.

Soon
after the CPI data came the ‘Summary’ of the recent Bank of Japan
meeting (March 18 and 19). The reports highlighted the debate on the
Board. Those in favour of quicker rate rises pointed to:

surging
food prices could persist and have a “big impact” on
underlying inflation.

• stronger
  wage growth supports tightening case
• and
  one member said Japan is nearing its inflation target
• Those
  taking a more cautious approach cited tariff-related risks to the
  economy. After the meeting, at his press conference and since then,
  Governor Ueda warned of heightening global economic risks also.

USD/JPY
saw some swings in response to the data and Summary. It hit highs
above 151.20 before dropping back to session lows around 150.70.

Very
early in the session, late US afternoon we had remarks from the fed’s
Collins and Barkin (posts above).

News
and data flow otherwise was light.

AUD
and NZD have lost ground, with no obvious ‘smoking gun’ news
crossing. Some yen cross selling is chatter.

Gold
raced to a record high, above US$3075.

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