by Chris Becker
As traders trawl through the Bank of Japan’s July statement on monetary policy, all eyes were on the PBOC which again devalued the Yuan in their daily fix, but only slightly.
The reference rate was lowered from 6.8131 to 6.8165, with offshore Yuan (USDCNH) extending into the 6.83s, potentially slowing this huge devaluation that the PBOC has done in the face of the Trump trade war:
The triple brace of PMI’s were mixed, with the non-manufacturing (services) index falling slightly to 54.0 from 55.0 in June, still well above the 50-point mark that separates growth from contraction.
The manufacturing measure fell more than expected, down to 51.2 in from 51.5 in June.
The composite PMI, which covers both manufacturing and services activity, fell to 53.6 from 54.4.
The BOJ in its monetary statement has said its going to adopt forward guidance on its policy rates, and will maintain “very low rate levels for extended period of time”, with a long term yield target of zero percent.
