25 Feb 2016
US asks for no more Shanghai surprises – Westpac
Sean Callow, Research Analyst at Westpac, suggests that as Shanghai hosts the G20, the US is suggesting no more CNY surprises while Japan is hoping for “co-ordination” on FX volatility.
Key Quotes
G20 central bank governors and finance ministers meet in Shanghai Fri-Sat, with a fair bit of public chatter already, mostly from the US and Japan. USD/JPY continues to cause concern. A surge in purchases of foreign bonds by Japanese investors last week didn’t prevent a renewed fall under 112, with JPY this month up almost twice as much as the next strongest currency, fellow haven CHF. Japan would like the G20 to agree to co-ordination to deal with
market volatility.
US Treasury secretary Lew meanwhile called for China to improve its communication on CNY, after the Aug 2015 surprise was “interpreted as reflecting something that they didn’t mean to convey.” We expect the G20 to repeat nearly all of the FX commentary from Turkey in Sep. Japan can probably only hope for an expression of concern over volatility - hardly a game-changer for the yen.”
Key Quotes
G20 central bank governors and finance ministers meet in Shanghai Fri-Sat, with a fair bit of public chatter already, mostly from the US and Japan. USD/JPY continues to cause concern. A surge in purchases of foreign bonds by Japanese investors last week didn’t prevent a renewed fall under 112, with JPY this month up almost twice as much as the next strongest currency, fellow haven CHF. Japan would like the G20 to agree to co-ordination to deal with
market volatility.
US Treasury secretary Lew meanwhile called for China to improve its communication on CNY, after the Aug 2015 surprise was “interpreted as reflecting something that they didn’t mean to convey.” We expect the G20 to repeat nearly all of the FX commentary from Turkey in Sep. Japan can probably only hope for an expression of concern over volatility - hardly a game-changer for the yen.”