Monday: US & Japanese intervention boosts yen

Intervention from the Fed and Japanese authorities drags the yen up off 40 year lows, just as the Bank of Japan suggests it may hike again in October. And leading indicators for China’s economy are much slower than expected in July.

In our deep-dive interview, ANZ Economist Bansi Madhavani analyses what UK bond investors want from the new Prime Minister Andy Burnham.

5 things to know in 5 minutes:

1. The Bank of Japan held its official interest rate at 1% on Friday, as expected, but comments from Governor Kazuo Ueda were slightly more hawkish than expected, says ANZ Head of FX Research Mahjabeen Zaman, who now sees another hike in October.

2. But much of the market’s attention on Japan was on the yen late last week, which bounced sharply from 40-year highs on speculation, and then confirmation, of various forms of intervention by Japanese officials and the Fed. Mahjabeen points to a report the Fed even sold euros to buy yen.

3. Australian private sector credit rose 0.8% in June, which was higher than market expectations for growth of 0.6%, but it didn’t come from housing lending this time, says ANZ Economist Maddy Dunk.

4. Maddy expects a slowing of lending to Australia’s rental property investors.

5. China’s PMI leading indicators for July for both the manufacturing and non-manufacturing sectors were much softer than expected, says ANZ Greater China Economist Vicky Xiao Zhou.

Cheers,

Bernard.

PS: Catch you tomorrow with a deep-dive interview with ANZ Group Chief Economist Richard Yetsenga on the US bond market’s reaction to comments last week by new Fed Chair Kevin Warsh, which unnerved some market players.

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