FX Update: A big miss in Chinese exports drove a risk-off play
FX Update: A big miss in Chinese exports drove a risk-off play in forex markets in the Asia session. AUD-JPY, which is a risk appetite proxy, shed nearly 1%, while USD-JPY, which had earlier clocked a 10-week high at 104.63, tipped back sharply to a low of 103.55, subsequently settling around 103.80. Aside from the 10% y/y dive in Chinese exports, softer oil prices and the latest FOMC minutes highlighting of hawkish arguments at the Fed were also in the mix of risk appetite spoilers. The yen gained in accordance with its historical inverse correlation with global stock market direction. The MSCI Asia-Pacific ex-Japan index lost over 1% as it fell into three-week low territory. USD-JPY needs to hold 103.28, yesterday's low to retain bullish trend credentials. A breach would signal a greater risk of a mean reversion move. The 20- and 50-day moving averages are presently at 102.09 and 101/89, respectively.