ForexLive Asia-Pacific FX news wrap: USD/JPY surges in Asia response to FOMC 50bp rate cut

• New Zealand remains in a prolonged recession. RBNZ needs to get cash rate below 4%, asap.
• Bank of England Interest Rate Decision: Analysts Predict No Change in Rates
• Australian August unemployment rate 4.2% (vs. 4.2% expected)
• PBOC sets USD/ CNY reference rate for today at 7.0983 (vs. estimate at 7.0924)
• What’s coming up from the Reserve Bank of New Zealand after the weak NZ GDP data!
• New Zealand GDP data showed a contraction, not as bad as expected – recap
• South Korean Finance Minister says ready to deploy “contingency plans” if needed
• Hong Kong’s central bank follows the Fed, cuts base rate by 50bp to 5.25%
• US House fails to pass government funding bill – government shut down looming
• New Zealand Q2 GDP -0.2% q/q (expected -0.4%)
• BoA anticipate the Bank of England (BoE) will maintain Bank Rate at 5.0% at meeting today
• Just waking up? Here’s the short summary of Wednesday’s FOMC rate cut
• Brazil’s central bank has hiked its benchmark rate by 25bps to 10.75% – yes, hiked
• China has frozen the assets of 9 US firms in the country
• Forexlive Americas FX news wrap 18 Sep: Fed starts rate cuts with a 50 bp cut
• ICYMI – US regulators to allow shares to trade in increments of half a penny
• Trade ideas thread – Thursday, 19 September, insightful charts, technical analysis, ideas

While
we had some significant data from the time zone today these were of
local importance only and the main driver continued to be the follow
through from the US Federal Reserve rate cut.

USD/JPY
was the most notable gainer. Early lows just under 142.00 were soon
shrugged off and the pair rocketed nearly 2 big figures higher. The
USD gained also against other major FX but not nearly to the same
extent, and, as I post, some of these have been retraced.

AUD
and NZD,
for example have net held on (AUD is higher on the session). Which
brings me to that local data I spoke of above.

From
New Zealand we had Q2 GDP data. This showed a contracting New Zealand
economy, though not as deeply as was expected. Growth in Q1, though,
was revised a little lower. The poor data emphasised the need for the
Reserve Bank of New Zealand to maintain its new easing cycle after it
first cut in August.

From
Australia we had August
month employment
data, with a strong headline of an unchanged unemployment rate and
nearly
50K jobs added on the month. The details, though, were not as
encouraging. The entire gain in employment was in part-time jobs,
while full-time jobs showed a (small) loss.

Regional
equities gained. Japan’s Nikkei was an outperformer, benefiting
from the weaker yen on the session.

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