The Nikkei is flat despite the overnight rise in USDJPY in response to higher Treasury yields, and S&P futures are down 0.1%. Most other Asian equity markets are up marginally.
After rallying overnight against the G10 currencies, the USD has stalled in Asian trading. EURUSD is at 1.3264, USDJPY at 97.95, just off its overnight highs, and AUDUSD has bounced off its lows to 0.9107. In contrast, the USD has rallied against most EM Asian currencies, led by 0.4% rises in USDKRW to 1119.4 and USDMYR to 3.2715. We believe Malaysia’s central bank conducted smoothing intervention at 3.2680 – 3.2720, but was not aggressively trying to cap the pair. USDCNY fixed 15pips higher to 6.1720 which nonetheless pushed the CNY slightly stronger on a trade-weighted basis.
The overnight rise in Treasury yields has pushed most Asian yields higher. JGB yields are up about 1bps in the belly and back end of the curve. Chinese yields 6 – 10bps have risen again, led by a 7bps rise in the repo rate to 3.86%. Korean swap rates are up 2 – 5bps.
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Credit Suisse