Edison | Oct 05, 2012 10:20AM ET
Economic Data
Asian equity markets are trading modestly higher, taking cue from positive lead on Wall St and shrugging the non-farm payrolls event risk on Friday following stronger-than-expected ADP jobs report. Energy markets have reversed overnight losses in near entirety, with geopolitical concerns flaring up from Tehran to Syria/Turkey border. Precious metals remained firm as gold added to US session gains to trade within $2 shy of the key $1,800 mark. In currencies, risk-on AUD and NZD pairs retreated from the recent lows as traders covered some short going into the weekend, while EUR and GBP kept to narrow ranges against the dollar in the wake of abstension from more easing by the ECB and the BOE earlier in the day.
The Bank of Japan policy decision was the primary event of the session and did produce some currency market impact, though nowhere near the amount of volatility that followed last month's surprise ¥10T expansion of the BoJ asset program. USD/JPY sold off some 25pips below ¥78.30 after BoJ stood pat on its program and inflation target - the two levers that some of the more dovish analysts continue to fixate on for further easing. Notably, BoJ did cut its economic assessment for the second consecutive meeting to state that "activity leveling off more or less", reiterated CPI is likely to remain around 0% for time being, and also introduced more focus into currency markets and overseas economic deceleration into its statement. The next policy meeting set for late October is widely expected to produce more aggressive market response, particularly if there is no progress on dealing with yen strength going into the Japanese earnings season.
Fixed Income/Currencies/ Commodities
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