JPY Remains Supported As Global Economic Outlook Dominates Market Focus

Heading into today’s European trading session, the risk tone is cautious as worries over China’s lockdowns continue to weigh on the global growth outlook. Asia-Pacific indices are mixed, volatility measures subdued and safe-havens mixed.

Leading Asia-Pacific indices to the upside is the Hang Seng at +0.49%, followed by the Nikkei 225 at +0.41% and the Topix at +0.11%. The CSI 300 and ASX 200 are both negative at -0.85% and -2.08%, respectively.

In the FX complex, it’s the antipodeans leading to the upside, with some support garnered from the PBoC’s efforts to prop up China’s economy, including easing its RRR and an injection of CNY 10 billion via 7-day reverse repos.

However, despite the above, concerns surrounding the global economic outlook are continuing to grow, pulling the antipodeans off their best levels and supporting JPY, which also remains supported across the board. As such, AUDJPY is quickly approaching the 92.00 handle, while NZDJPY was unable to hold the 85.00 handle after briefly breaking above in late Asia-Pacific trade.

Looking ahead, today’s economic calendar is light on tier one data, keeping the market’s attention fixed on ongoing themes such as the global economic outlook, China’s economic outlook/lockdown and policy divergences between central banks.