The investingLive Asia-Pacific FX news wrap: Awaiting the US NFP data | investingLive
- China's inflation edges higher, avoiding deflation in 2025, but easing measures remain in place (https://investinglive.com/news/chinas-inflation-edges-higher-avoiding-deflation-in-2025-but-easing-measures-remain-in-place-20260109/)
- ECB vice-presidential hopeful Centeno highlights 'structural uncertainty' for Europe (https://investinglive.com/centralbank/ecb-vice-presidential-hopeful-centeno-highlights-structural-uncertainty-for-europe-20260109/)
- Goldman Sachs predicts NFP data won't shift April Fed cut unless there's a sharp surprise (https://investinglive.com/news/goldman-sachs-predicts-nfp-data-wont-shift-april-fed-cut-unless-theres-a-sharp-surprise-20260109/)
- China tightens rare-earth exports to Japan, sparking concerns with G7 and US (https://investinglive.com/news/chinas-tightening-rare-earth-exports-to-japan-sparks-concerns-with-g7-and-us-20260109/)
- China's inflation hits a near three-year high, but producer deflation signals weak demand (https://investinglive.com/news/chinas-inflation-hits-a-near-three-year-high-but-producer-deflation-signals-weak-demand-20260109/)
- China's December 2025 CPI: +0.8% y/y (vs. expected 0.9%, prior 0.7%) (https://investinglive.com/news/chinas-december-2025-cpi-08-yy-vs-expected-09-prior-07-20260109/)
- PBOC sets USD/CNY reference rate at 7.0128 (vs. estimated 6.9832) (https://investinglive.com/centralbank/pboc-sets-usd-cny-reference-rate-at-70128-vs-estimated-69832-20260109/)
- Sterling gains may be premature as banks warn of UK-EU reset and weak UK growth (https://investinglive.com/forex/sterling-gains-may-be-premature-as-banks-warn-of-uk-eu-reset-and-weak-uk-growth-20260109/)
- Goldman predicts lower but attractive 2026 equity returns: AI shift to adoption, credit capped (https://investinglive.com/stock-market-update/goldman-predicts-lower-but-attractive-2026-equity-returns-ai-shift-to-adoption-credit-capped-20260109/)
- Japan's household spending rebounds, but real wages lag, complicating BOJ outlook (https://investinglive.com/centralbank/japans-household-spending-rebounds-but-real-wages-lag-complicating-boj-outlook-20260108/)
- Japan Household Spending (November 2025): +2.9% y/y (vs. expected -0.9%, prior -3.0%) (https://investinglive.com/news/japans-household-spending-november-2025-29-yy-vs-expected-09-prior-30-20260108/)
- Musk suggests China will dominate AI compute, downplaying chips and touting power advantage (https://investinglive.com/stock-market-update/musk-suggests-china-will-dominate-ai-compute-downplaying-chips-and-tout-power-advantage-20260108/)
- Goldman survey reveals investors sharply bearish on oil as supply glut emerges (https://investinglive.com/commodities/goldman-survey-reveals-investors-sharply-bearish-on-oil-as-supply-glut-emerges-20260108/)
- HSBC raises long-term gold forecasts but trims 2026 average, foreseeing a $5,000 upside risk (https://investinglive.com/commodities/hsbc-raises-long-term-gold-forecasts-but-trims-2026-average-foreseeing-a-5000-upside-risk-20260108/)
- investingLive Americas market wrap: US trade balance surprise boosts GDP estimates (https://investinglive.com/news/investinglive-americas-market-wrap-us-trade-balance-surprise-boosts-gdp-estimates-20260108/)
- Trump proposes a $200bn mortgage-bond buying plan to lower US home loan rates (https://investinglive.com/news/trump-proposes-a-200bn-mortgage-bond-buying-plan-to-lower-us-home-loan-rates-20260108/)
- US equity close: Energy leads, while memory chip names retreat from recent rally (https://investinglive.com/stocks/us-equity-close-energy-leads-while-memory-chip-names-retreat-from-recent-rally-20260108/)
At a glance:
- Trump's proposed MBS purchases blur fiscal and monetary policy lines
- USD remains firm, with USD/JPY above 157.25
- Japan's spending data is strong, but real wages continue to fall
- China's CPI improves, but deflation risks persist
- Markets are cautious ahead of US NFP and tariff ruling
As the US afternoon winds down, Donald Trump made headlines by instructing representatives to buy $200bn in mortgage-backed securities, effectively proposing a presidential directive version of QE. Trump framed this move as a way to narrow mortgage spreads and reduce borrowing costs, aiming to restore housing affordability. While this action is labeled 'QE' in market jargon, it's more accurately a fiscal policy initiative. The announcement reinforces the expectation that policy will become increasingly populist as the US enters the 2026 election cycle. With Trump's approval ratings under pressure, further fiscally expansive initiatives are likely in the coming months, which could ultimately impact the US dollar negatively.
However, today the USD remained firm, particularly against the yen, with USD/JPY pushing above 157.25. This occurred despite stronger Japanese data showing a 2.9% y/y rise in household spending in November, far exceeding expectations, and a 6.2% m/m surge. The data suggests near-term resilience in consumption, but the broader picture remains fragile, with real wages still falling 2.8% y/y, eroding purchasing power. The yen was further weighed down by renewed concerns over China's restriction of rare-earth and magnet exports to Japan, escalating a dispute linked to Taiwan-related comments. Japanese officials expressed strong concern and indicated that the issue would be raised with G7 partners and US counterparts, adding a geopolitical risk premium to JPY trading.
Elsewhere, major FX pairs were relatively subdued as markets positioned cautiously ahead of US non-farm payrolls, due on Friday at 13:30 GMT / 08:30 ET.
