BOJ: Koeda - Gives Upbeat Comments On Inflation But No Hint On Rate Hike Timing
Headlines have crossed from BoJ board member Koeda's speech. At first glance they appear in line with recent rhetoric from key BoJ board members. There were some hawkish undertones, with Koeda noting that the central bank must normalize rates to avoid distortions in the future and that underlying inflation is around 2%. She added that inflation is relatively strong, but via RTRS: "IN ORDER TO ACHIEVE THE PRICE STABILITY TARGET, IT IS IMPORTANT TO EXAMINE THE EXTENT TO WHICH UNDERLYING INFLATION REMAINED STABLE OR BEEN ANCHORED". She also didn't give any hints on rate hike timing (which is hardly surprising ahead of Ueda's speech on Dec 1).
- On growth she reiterated the viewpoints from the Oct meeting around growth risks being skewed to the downside for fiscal 2026, but said the economy wasn't in bad shape.
- Note before Ueda's speech on Dec 1 we also hear from board member Noguchi on Nov 27.
- USD/JPY has crept higher as the headlines from the speech crossed, hitting fresh highs of 157.45/50 (but cross asset trends are supportive of yen losses, with US equity futures trending higher, while Tsy yields are ticking higher).
- JGB futures remain in a downtrend, sitting at 135.10, -.51, at the lunch time break.
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ASIA STOCKS: Tech Equity Gains Should Support South Korea/Taiwan Inflows
Yesterday saw outflows from South Korea, but Taiwan inflows were positive. For South Korea, this looks to be a pause in what is otherwise a positive flow backdrop, as we continue to see global equity sentiment recover after last week's credit induced wobbles. Apple also buoyed broader tech sentiment as shares rallied on positive reports on new Iphone demand. This should benefit markets like South Korea and Taiwan. So far today, both markets are tracking firmly higher, both at fresh record levels. For Taiwan, yesterday's inflow still wasn't enough to bring the 5-day sum back into positive territory though.
- Indian inflow momentum remained strong, as YTD outflows continue to ebb lower. Onshore equity momentum remains positive.
- In South East Asia, outside of modestly positive inflows for Indonesia (ahead of tomorrow's expected BI cut), we are seeing light outflow pressures for the past 5 trading days elsewhere.
Table 1: Asian Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | -77 | 1135 | 3495 |
| Taiwan (USDmn) | 257 | -973 | 6587 |
| India (USDmn)* | 100 | 760 | -16167 |
| Indonesia (USDmn) | 32 | 11 | -3081 |
| Thailand (USDmn) | 2 | -156 | -3096 |
| Malaysia (USDmn)** | -45 | -135 | -4175 |
| Philippines (USDmn) | -2 | -18 | -716 |
| Total (USDmn) | 267 | 624 | -17153 |
| * Data Up To Oct 20 | |||
| ** Data Up To Oct 17 |
Source: Bloomberg Finance L.P./MNI
CHINA: Central Bank Injects CNY68.5bn via OMO
- The PBOC issued CNY159.5bn of 7-day reverse repo at 1.4% during this morning's operations.
- Today's maturities CNY91bn.
- Net liquidity injects CNY68.5bn.
- The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
- The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.41%, from prior close of 1.43%.
- The China overnight interbank repo rate is at 1.30%, from the prior close of 1.30%.
- The China 7-day interbank repo rate is at 1.41%, from the prior close of 1.40%.
CNH: USD/CNY Fix Set At Fresh YTD Lows, USD/CNH Near 7.1200
The USD/CNY fix printed at 7.0930, a fresh low for 2025 and back to Oct last. The BBG market consensus was 7.1219, leaving the fixing error at -289pips, only slightly tighter than yesterday's -356pips outcome. USD/CNH is testing sub 7.1200 in latest dealings, with today's fixing result to keep the downside bias in the pair intact. A clean break under recent lows (7.1168) should bring the 7.100 level back into focus.
