ForexLive Asia-Pacific FX news wrap: China launches stock buyback funding

JPY verbal intervention:Japan govmt says closely watching speculative FX movesYen intervention comments out of JapanChina:PBOC Governor says 7-day reverse repo rate will be lowered by 0.2%PBOC has officially ramped up support for the stock market, relending facility launchedChina National Bureau of Statistics (NBS) official says economic indicators positve changePBOC Governor provides directions for stock buybacksChina Sept: Retail sales +3.2% y/y (expected +2.5) Industrial production +5.4% y/y (4.6)China Q3 GDP 4.6% y/y (expected 4.5%) 0.9% q/q (expected 1.0%)China September new house prices -5.7% y/y (prior -5.3%)PBOC sets USD/ CNY reference rate for today at 7.1274 (vs. estimate at 7.1267)PBOC says its necessary to increase support to the real economyOtherUS politics - "Big Jack Smith document dump" expected Friday - Trump wanted this blockedConfirmation news - China banks cut fixed deposit rates by 25bpJapan data - September CPI Headline +2.5% y/y (vs. +2.5% expected)Japan CPI data due at 2330 GMT / 2230 US Eastern timeICYMI - NAB forecast a Reserve Bank of Australia rate cut at the first meeting of 2025Trump tariffs "would fall particularly heavily on states in the Midwest and South"UBS see plenty more European Central Bank rate cuts, Dec & 2025. Euro has cyclical supportRBC expect a cascade of European Central Bank rate cuts for the next six months+TD on the European Central Bank - no major surprise. Now pessimistic on euro.North Korean dictator Kim Jong Un says South Korea is hostileDecentralized AI Summit at MIT Votes OriginTrail as the Best Decentralized AI ProjectDeutsche Bank expect faster rate cuts from the European Central Bank to comeDownbeat comments from the IMF on China: reforms needed, 'trouble', 'failure'US Treas Sec Yellen warns that Tump's proposed massive tariffs would surge inflationForexlive Americas FX news wrap: ECB cuts rates, US retail sales beat estimatesMajor US stock indices close mixed. S&P and NASDAQ give up gains.Trade ideas thread - Friday, 18 October, insightful charts, technical analysis, ideasLet’sget Japan and the yen out of the way first and then on to China. Inflationdata from Japan for September kicked the session off. All three ofthe main measures came in at or above the Bank of Japan 2% target,although two of them were lower than the previous month. Iexpressed the view a few times that I don’t think the data is tooimportant for the Bank of Japan right now, they seem intent on hikingregardless of what the readings are. Market consensus is swinging(has swung?) towards a December rate hike, which is looking possible (its notlocked in by any means). TheCPI data didn’t move the yen too much. USD/JPY was ticking quietlyaround 150.20. That changed with some verbal intervention fromAtsushi Mimura, Japan's vice finance minister for internationalaffairs, AKA 'top currency diplomat'. Mimurajumped straight into forthright comments, hitting hot buttons like:recentyen moves somewhat rapid and one-sidedexcessvolatility in FX market is undesirableAlittle later a Japanese government spokesman referred to the moves as‘speculative’. USD/JPYfell away. But only a little. Back under 150.00 but not much lowerthan 149.90. Its useful to remember that despite all the talk andcentral bank decisions there is still a very wide policy gap betweenUS and Japanese rates, which tends to weigh against the JPY. Itwas a busy day from China. The details are in the points above, butthe main points:newhome prices fell at the fastest rate since 2015ChinaQ3 GDP came in at 4.6% y/y, better than expected (but do note that Q2was revised a little lower)Retailsales for September came in much better than expected, and industrialoutput also.Theimprovements in the September data were surprising. The stimulusannouncements began to roll out from September 24, so the month wouldhave been doing well even before these. That's encouraging. So many(me included) were disappointed by the announcements from China, butgiven the data seems to be improving anyway perhaps its sufficient.Oh, if you want to argue with me that Chinese data can be verymanipulated I don’t think I can counter you. Yeah, gotta be wary ofthat. But,it didn’t stop there. The People’s Bank of China launched itsrelending facility to help listed firms stock repurchases andincreasing shareholdings. Inaddition, the Bank’s governor Pan Gongsheng flagged further rateand RRR cuts to come.Major Chinese banks announced deposit rate cuts, as expected.Onelast thing, and its US politics related. Given the race is so close,and the Harris vs. Trump economic policies are quite different, itsgoing to be necessary to pay closer attention in the next two weeksas we approach voting day. News crossed from ‘Politico’ areputable US politics site, that a ‘data dump’ is expected inrelation to Trump’s trial over his attempt to overturn his 2020election loss. Trump wanted the information release delayed untilafter the election, the judge has decided ‘no’. The documents aresaid to be being released some time on Friday and may be something towatch for. Or not, we’ll see. Now,having said all this, such a long wrap, major FX has not done a lottoday. Yen crosses were notable but USD/JPY has only had a 40 or sopoint range. Chinese markets have been more active. Equities are upslightly on the day so far. This article was written by Eamonn Sheridan at www.forexlive.com.