Japan’s markets unwind Abenomics “2” trades as Komeito exit fuels political uncertaintyConocoPhillips warn oil market sentiment may be too bearish as physical supply stays tightS&P affirm New Zealand ratingsRecap: China deflation eases but persists, longest price decline streak since 1970s reformChina sees Trump’s stock market fixation as leverage in trade standoff (WSJ)China September CPI -0.3% y/y (vs. expected -0.2%)The PBOC cracking 7.1 in its USD/CNY fix has sent the USD lower across the boardPBOC sets USD/ CNY mid-point today at 7.0995 !!! (vs. estimate at 7.1281)JPMorgan’s Dimon says owning gold makes sense in today’s market, could go to US$10,000RBNZ’s Conway says a bit ‘nerve wracking’ with inflation at the top of its target bandEUR4.13bn strikes in EUR/USD circa 1.1600. A likely magnet for EUR/USD in Asia.Standard Chartered sees euro slipping to 1.13 by mid-2026: rate cuts, growth headwindsPBOC is expected to set the USD/CNY reference rate at 7.1281 – Reuters estimateAustralian September Leading Index “nudges back up to just over trend”More from RBA’s Hunter: Policy being set on a 1 to 2 year horizon, its foreward lookingRBNZ’s Conway: No new monetary policy tools planned, OCR remains main policy instrumentRBA’s Hunter: Inflation is likely to be stronger than forecast in Q3RBNZ’s Conway: Rates of 2.5% at lower end of neutral range, but we are feeling our wayICYMI: Deutsche Bank upgrade Europe vs US, sees 12–16% upside. Stimulus & earnings reboundRBNZ’s Conway doesn’t expect to use additional monetary policy tools again any time soonGlobal investors crowd into gold as bullish sentiment hits eight-month high — BofA surveyEconomists want Waller as new Fed Chair. But, sry Chris, Trump is just not that into you.US moves to seize $12 billion in bitcoin tied to Cambodia scam kingpin Chen ZhiReserve Bank of New Zealand’s Conway says will close the gap between Dec, Feb meetingsinvestingLive Americas FX wrap: Trump saps the momentum with a China tweetPowell remarks confirm October 28 – 29 rate-cut expectations, says JPMorganChina hits first US-linked ship with $1.7m “special port fee” in trade retaliationJapan to ban cryptocurrency insider trading with new rules – Nikkei reportingUS stocks close mixed. Dow rises. Nasdaq fallsMore from Fed’s Collins: Inflation continues to be top of mind
It was a session dominated by central bank signals across the region, with New Zealand, Australia, Japan and China all in focus. The net effect was a stronger yen, firmer major FX against the dollar, and growing evidence that policy paths across the region are diverging.
New Zealand:
Reserve Bank of New Zealand Chief Economist Paul Conway said the official cash rate (2.5%) sits at the lower end of its neutral range but reaffirmed that policymakers remain open to further easing if required. The RBNZ has cut by 300bps since August 2024, including last week’s surprise 50bp move, amid worries over the economy’s fragile state. His remarks reinforced the RBNZ’s willingness to act if growth fails to stabilise.
Australia:
Reserve Bank of Australia Assistant Governor (Economic) Sarah Hunter said recent data showed Q3 inflation is a touch print hotter than forecast, pointing to a still-tight economy even as job growth slows. Speaking at a Citi event, she flagged sluggish productivity as a structural constraint that lowers Australia’s growth and wage “speed limits.” Her comments tempered expectations of near-term rate cuts, underscoring the RBA’s cautious approach as inflation risks remain sticky.
China:
The People’s Bank of China set the USD/CNY fixing below 7.10, a stronger-than-expected signal that triggered broad, if restrained, USD selling across G10 and Asia FX. EUR, GBP, and AUD all moved higher on the yuan’s strength.
Separately, China’s latest inflation data showed deflation lingering even as it eased marginally. CPI fell 0.3% y/y in September (vs –0.2% expected), while PPI declined 2.3%, marking a third consecutive year of factory-gate deflation. The only bright spot was core CPI, up 1.0% y/y, its highest in 19 months, suggesting some stabilisation in consumer demand.
Japan:
The yen extended its rebound as political uncertainty deepened. The market’s assumption of a Takaichi-led LDP government—and with it, a continuation of Abenomics—has weakened after Komeito’s exit from the ruling coalition. Jiji reported a parliamentary deadlock over the October 21 vote to select Japan’s next prime minister, keeping political risk elevated.
USD/JPY dropped to 151.00 and EUR/JPY to 175.50, as traders unwound weak-yen and long-equity positions.
The Nikkei 225, which had reached a record 48,597 earlier this month, has since corrected more than 2,000 points. It rose today.
Gold rose. Again.
Asia-Pac
stocks:
Japan
(Nikkei 225) +1.13%Hong
Kong (Hang Seng) +1.2%Shanghai
Composite +0.1%Australia
(S&P/ASX 200) +0.74%
This article was written by Eamonn Sheridan at investinglive.com.