USD extended losses in Asia trading. EUR spiked to a high above 1.33, before easing slightly to 1.329. AUD also pushed higher to 0.918, and NZD to 0.806. USDJPY fell to 97.68 as Finance Minister Aso downplayed the possibility of lowering corporate income tax. SGD made modest 0.2% gains in EM Asian FX, but IDR fell to a low of 10334 against the USD ahead of the Bank Indonesia meeting. USDMYR also reversed earlier fall, trading 0.2% higher on the day.
The Nikkei dropped 2%, in tandem with the fall in USDJPY. Equity markets elsewhere were flat to slightly lower. Markets in Korea and India are closed for a public holiday. JGB yields fell 1bps in the belly, and Asian swap yields are mostly 1 to 2bps lower.
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Credit Suisse