Asian traders shift focus to risky assets (30.05.2018)
This trading day is packed with macroeconomic events. The focal event during the Asian trade is a speech of Bank of Japan Governor Haruhiko Kuroda.
The Governor stated that the burning issue for the central bank is to find out reasons behind protracted low inflation in Japan despite long-lasting stimulus programs.
The policymaker signaled that the central bank is ready to reconsider whether it makes sense to pursue the same ultra-soft monetary policy. This hint was bullish for the Japanese currency. The dollar/yen pair is still trading at about a monthly low of 108.70. Nevertheless, analysts foresee a change in trading sentiment in the short term, so the pair could resume its advance.
Political tensions, which triggered demand for safe haven assets, have been waning. The White House confirmed the intention to arrange a new summit with North Korea.
Besides, according to some media reports, Beijing is ready to make concessions to avoid a full-blown trade war with the US. China’s authorities stress that they do not give up in fear but prefer to settle the trade dispute with more loyal methods.
Today, risky assets are winning favor with investors. The New Zealand dollar is trading close to 0.6930 against the US dollar. The kiwi found support from remarks of the central bank’s governor and a financial stability report. The board of the Reserve Bank of New Zealand noted that the financial system remains on a sound footing.
Interestingly, the Australian dollar also advanced to 0.7525 against its American counterpart despite downbeat data on the construction sector.
According to the government data, the number of building approvals contracted 5% in April month-on-month, more than expectations for a 2.9% drop. In annual terms, the indicator eased to 1.9% from a 15.6% gain in March.
At present, the US dollar is making a minor downward correction. Nevertheless, most analysts share the viewpoint that the US currency is likely to climb to recent highs as the US is due to release nonfarm payrolls for May.
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