- China: PBoC raised its 91-day auction by 3bps to 1.36%, much higher than the 1.33% expected by markets. The central bank is set to drain a net CNY137 bln from the market this week, the largest weekly drain in close to 3 months.
- S Korea: FinMin has announced that it will present its view on the economy and policy at the monthly BoK meetings starting from 8 Jan in a bid to strengthen policy coordination between the FinMin and central bank.
- Malaysia: EnergyMin Chin said that the govt has not decided on whether to raise power prices.
- Indonesia: Senior deputy governor Nasution said that the high capital inflows recently have caused rupiah gains but they are not expected to be permanent.
- Philippines: BSP Governor Tetangco was quoted by Bloomberg, saying that the rediscounting interest rates could be raised.
- Philippines: December FX reserves ballooned to USD 45.0 bln from USD 44.17 bln in end-Nov.
- Thailand: Privy Councillor and former prime minister Surayud Chulanont, said he was worried the planned Red Shirt rally on Monday will lead to violence.
- Thailand: Bangkok Post reports two bombs went off in the southern border province of Yala this morning resulting in one death and two injuries. This occurred as PM Abhisit and top security officials paid a one-day visit to the violence-plagued region.
- Japan: MoF Naoto Kan said that he wants Yen to weaken more and must work with BoJ to bring Yen to appropriate l evels.
- Dubai troubled mortgage lender Amlak says it will make its semi-annual coupon payment on its 2010 Sukuk on January 18 - Reuters.
- NKS: 3 creditor megabanks have proposed a turnaround plan for Japan Airlines that involves debt forgiveness and shareholder dilution as the first option, and bankruptcy as a fallback, The Nikkei has learned. Under the plan, the 3 creditors would forgive over Y300bn in loans, request shareholders to accept a reduction in their ownership stakes.
NKS: A consortium of four Japanese general contractors and one Turkish firm will suspend construction of the Dubai Metro as early as Thursday, citing the delay in payment from the Dubai government. The rail system was partially opened this past fall. Its full completion, originally slated for this spring, is now expected to be pushed back until the end of the year for a number of reasons, including design changes. The consortium members -- including Obayashi, Mitsubishi Heavy Industries, Mitsubishi Corp and Kajima Corp -- have decided to halt work for the time being, placing priority on talks with the Dubai government to secure back payments.
USD/Majors came back to life in the afternoon with the dollar index surging from range bound 77.4-77.5 level in the morning to highs of 77.70-77.775 as comments out of new Japanese MoF favouring a weaker JPY. The resulting squeeze higher in USD/JPY, and selling of GBP/JPY, EUR/JPY into rallies saw the dollar appreciably higher as Europe got underway. Aussie, Kiwi also came under pressure from the stronger dollar in Asia.
JPY crosses were rather choppy in the session continuing the easing bias seen in the morning before making a sharp about turn across the board following new MOF Kan's comments favouring a weaker JPY. Selling into rallies seen in the EUR/JPY, GBP/JPY, but on the whole, Cross/JPY back at overnight levels with USD/JPY appreciably higher.
USD/Asians were off the lows in the afternoon and retained a supportive tone, barring the USD/INR which came under selling pressure by foreign names and offshore markets during European open. Some central banks were seen lending support to the pairs. Regional equities ended the session in red.
Oil in a relatively range-bound session after the morning dip below the $83 handle. Crude oil last traded at $82.71/bbl.
Gold also consolidating with easing bias in Asia. Dollar firmed up in the session, keeping price action heavy. Spot gold trading at $1132.45-1133.25/oz at last indication.
NORTH ASIA
USD/KRW: The pairing was pretty flat into closing and finished at 1135.4.
USD/CNY: Spot extended its gradual firming bias into the afternoon session while 1-yr remained little changed about the 6.64 handle.
USD/HKD: Spot garnered support in Asia, edging back toward the 7.7560 handle as the dollar came off the lows on Thursday.
USD/TWD: Prices closed higher at 31.877 as Taiex stumbled and dollar climbed; intervention fears continued to support as well.
SOUTH ASIA
USD/SGD: The pairing consolidated off lows in 1.3950-ish levels as Asia close approached on the soggy euro.
USD/MYR: Prices were supported towards the 3.37-mark towards close as the dollar bulls found favour.
USD/IDR: Little change in the pairing though dollar support helped alleviate pressure; focus on BI's comments about rupiah strength.
USD/PHP: The pairing came off the opening lows in the afternoon but settled back down into close at 45.83.
USD/THB: Prices remained stuck in the 33.11-33.14 band with agents heard below. Dollar support also kept prices off the 33.10 handle.
USD/INR: Spot collapsed in the session, dipping to lows of 45.57 before rebounding in late Asia back toward the 45.70 handle.
