Quick overview of Asian FX market
Negotiations around the US fiscal cliff seem to have made some progress and this has resulted in improved risk sentiment. Equity markets are moderately higher, US yields are higher, all of which have helped USD/JPY to rally. The RBA minutes have cast a bit of doubt on when the next cut might be due and the chances of a 25 bps rate cut in February will have dropped. Chinese FDI fell by over 5% YoY but no-one paid any attention to that number. Flows were light all day but real-money bids were noted in USD/JPY near 83.60 overnight. JPY crosses have edged slowly higher through the session.