In today’s trading session, major FX rates experienced limited movement. The USD/JPY pair saw a slight uptick, reaching an 11-month high above 149.75. The Bank of Japan released the ‘Summary of Opinions’ from its September meeting, which provides a concise overview of the views expressed by Policy Board members. The summary revealed that there are no plans for a policy tweak or change from the Bank this year, contributing to the weakening of the yen. Additionally, rising US yields played a role in this trend.
Over the weekend, China released a mixed bag of Purchasing Managers’ Index (PMI) data. The official PMIs from China’s National Bureau of Statistics showed improvement from August, beating expectations and signaling expansion. Furthermore, the manufacturing sector returned to expansion for the first time in six months. However, the privately-surveyed Caixin PMIs dipped from August, missing expectations. Nonetheless, they remained in expansion, which is a positive indication for the Chinese economy.
In the US, the Congress passed a short-term funding bill to finance the government for the next 45 days. President Biden signed the bill into law, granting the Congress until mid-November to reach a more lasting agreement. The markets will be closely monitoring the negotiations between the warring factions during this period.
In Asian equity markets, the Nikkei 225 in Japan recorded a 1.4% increase, propelled by the weakness of the yen. The Shanghai Composite in China remained closed for the national holiday, while Hong Kong’s Hang Seng was closed today but will reopen on Tuesday after the holiday. South Korea’s KOSPI index saw a slight 0.1% gain, while Australia’s S&P/ASX 200 index declined by 0.1%.
Overall, the markets were influenced by the USD/JPY exchange rate, the Chinese PMI data, and the temporary funding bill passed by the US Congress.
