<ul><li>2-year Treasury yields +4.2 bps to 4.241%</li><li>10-year Treasury yields +4.4 bps to 3.561%</li><li>30-year Treasury yields +2.6 bps to 3.676%</li></ul><p style=““ class=“text-align-justify“>This is helping to underpin USD/JPY slightly at the moment, with the pair now up 0.2% to 132.15 from around 131.70 levels earlier in the session. There is still a state of flux among major currencies as broader markets remain more cautious and tentative but bonds are slipping a little on the session, with stocks also holding slightly lower.</p><p style=““ class=“text-align-justify“>All eyes are on the upcoming remarks by Fed chair Powell but as mentioned <a target=“_blank“ href=“https://www.forexlive.com/news/tentative-mood-as-markets-await-powell-20230110/“ target=“_blank“ rel=“follow“>here</a>, we might not even get anything significant from Powell later on. As such, just be wary of that possibility and that could very well cause a turn in market sentiment when Wall Street steps into the fray.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Prior 91.9</li></ul><p style=““ class=“text-align-justify“>The index falls to a six-month low in December, as inflation and worker shortages remain major impediments for business owners. Of note, it was the twelfth month running that the index holds below the 49-year average of 98. Looking at the details, roughly 32% of owners reported that inflation was their single most important problem – unchanged since November.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>To ensure steady, orderly property financing</li><li>To ask banks to further optimise credit structure</li></ul><p style=““ class=“text-align-justify“>The vow to ensure support for domestic demand is pretty much just reaffirming their ongoing support for the economy, as seen with credit conditions <a target=“_blank“ href=“https://www.forexlive.com/news/china-december-m2-money-supply-118-vs-122-yy-expected-20230110/“ target=“_blank“ rel=“follow“>here</a>.</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>In case you missed it, Eamonn had the data release earlier in the day <a target=“_blank“ href=“https://www.forexlive.com/centralbank/japan-data-december-tokyo-area-cpi-core-core-is-27-yy-20230109/“ target=“_blank“ rel=“follow“>here</a>. The core reading came in at 4.0% y/y, which is the highest since April 1982 with the core-core reading rising to 2.7% y/y in December, up from 2.5% y/y in November.</p><p style=““ class=“text-align-justify“>While the report only measures inflation in Tokyo, it very much presents the likelihood that overall inflation in Japan had stayed above the 2% target by the BOJ through December.</p><p style=““ class=“text-align-justify“>The Japanese central bank will announce their next policy decision on 18 January and while policymakers aren’t likely to spring another surprise on markets, it is widely expected that they will raise their inflation forecasts at least.</p><p style=““ class=“text-align-justify“>However, as long as inflation data continues to show up like what we saw today, it will be harder and harder for the BOJ to keep ignoring the prospects of having to shift their policy stance.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Prior +12.4%</li><li>New yuan loans ¥1.4 trillion vs ¥1.1 trillion expected</li><li>Prior ¥1.2 trillion</li></ul><p style=““ class=“text-align-justify“>The numbers continue to support the narrative that China is aiding the market recovery at least, particularly so after having been crippled by its previous zero-Covid policy. For some context, the new yuan loans issued throughout 2022 is a record, coming in at ¥21.3 trillion. Considering the re-opening, I doubt Chinese authorities will let up until they have a fair sense of confidence that the economy can hold its own.</p>

This article was written by Justin Low at www.forexlive.com.