Evergrande is in the driver’s seat in Asia Forex news.
On Wednesday, September 22, 2021, forex news for Asia trading will be :
The currency day started slowly, with a little decline in yen crosses as USD/JPY fell below 109.20 and other currencies sagged slightly versus the dollar.
Evergrande said over the wires just before the opening of Chinese stock markets following the four-day weekend that it would be making payment on a local currency denominated bond coupon due tomorrow, September 23. On the announcement, risk trades rose: equity index futures, the AUD (and other currencies) all rose. The People’s Bank of China responded with a cash infusion in open market operations, the largest in OMOs since January of this year.
With the passage of time, doubts about whether payments due in USD would also be made tomorrow arose, and the risk trade began to unwind partly as a result of these fears. Keep in mind that Evergrande has news that another Chinese property development business has ceased its bond trading.
China’s President Xi Jinping says the country will no longer build coal power plants abroad
Other things of interest today were mostly focused on China as well. Deputy Governor Debelle of the Reserve Bank of Australia expressed confidence that authorities in the country would handle any default by Evergrande. For the 17th month in a row, the People’s Bank of China kept its one-year and five-year lending prime rates constant.
The Bank of Japan delivered its monthly policy statement and forecast, with the main policy settings remaining unchanged as predicted and its economic assessments being trimmed once more.
Bank of Japan leaves its policy settings unchanged, as expected :
- 10 year JGB target yield around 0%
- short term rate target remains -0.1%