ForexLive Asia-Pacific FX news wrap: Yellen green-lights higher USD/JPY

• The S&P 500 has risen in the year after every midterm election since World War II
• Federal Reserve speakers coming up Wednesday, 12 October 2022 – Kashkari, Barr, Bowman
• JP Morgan forecast Fed’s upper band of target range to 4.75%, and stay there through 2023
• Bank of England speakers on the schedule for Wednesday 12 October 2022: Haskel, Pill, Mann
• Japan chief cabinet secretary Matsuno: will take appropriate steps on excessive FX moves
• Japan’s machinery orders had largest fall in 6 months – recap (ps USD/JPY rising still)
• US allows at least 2 non-Chinese chipmakers in China to receive restricted goods & support
• PBOC sets USD/ CNY reference rate for today at 7.1103 (vs. estimate at 7.1236)
• US President Biden says he does not expect a recession, but its possible
• Japan fin min Suzuki: ‘no change’ to stance, still watching FX moves with sense of urgency
• Bank Of Korea has raised its key base interest rate to 3.00%, from 2.50%, and as expected
• US CPI data is due on Thursday, preview. “Would be surprised if core were 0.6% or higher”
• USD/JPY rises … surges … above 146.00
• ICYMI: New bank lending in China nearly doubled in September from August
• Japan data – Machinery orders -5.8% m/m in August (expected -2.3%)
• Japan’s Manufacturers sentiment declined again in October (Reuters Tankan survey)
• Fed’s Mester: Federal Reserve needs to hike rates further because inflation has not slowed
• RBA Ellis says policy is no longer expansionary
• Reports that Intel is planning to cut thousands of jobs
• RBA Ellis says the implied neutral rate in Australia is at least 2.5%
• It sounds like the White House is softening us up for a high CPI number on Thursday
• ECB’s Villeroy: debate about +50bp or +75 in October is premature in such volatile markets
• Goldman Sachs revise forecasts for CAD, AUD & NZD lower, but acknowledge risk rally risk
• Trade ideas thread – Wednesday, 12 October 2022
• More from US Treas Sec Yellen – watching UK developments, still work to do on inflation
• IMF Chief Economist says central bank fight against inflation will continue well into 2024
• US Treasury Secretary Yellen says the level of the USD is a logical outcome of policy
• Economic calendar in Asia – Wednesday, 12 October 2022 – RBA speaker (Ellis)
• Yellen says we are beginning to see some signs of easing pressure in labor market
• Forexlive Americas FX news wrap: BOE’s Bailey lays down the gauntlet
• Broader US stock indices close lower. Dow industrial average snaps 4 day losing streak

US
Treasury Secretary Yellen spoke
in a US TV interview, CNBC, covering a broad range of topics. It was
her remarks on the USD that set a fire under USD/JPY though. In the
post here:

The
long story short version is Yellen tipped cold water on talk of
coordinated global FX intervention.

USD/JPY
took its time, until Tokyo began, but eventually traded up through
146.00, to its highest since August of 1998. As I update the pair has
topped out above 146.30. We had verbal intervention from Japanese
authorities during morning trade, but nothing convincing at all.
Check out the yen-related posts above for links to past posts on what
to watch for when actual intervention is imminent.

Hapless
GBP traded lower on the session after Bank of England Governor
Bailey cut the legs out from under it and gilts on Tuesday:

Regional
equities here fell again. China and Hong Kong were lower while
Japan’s Nikkei was also, but only just (as I update).

On
the central bank front, we had a speech from Reserve Bank of
Australia’s Luci Ellis, Assistant Governor (Economic). The Bank of
Korea hiked its base rate by 50bp to 3%, in an expected move.

US
President Biden spoke in a US media interview saying he didn’t expect
a recession but if there was one it’d be mild. This is code for
there is a recession on the way and it could be ugly.