Ahead Today
G3: US ISM manufacturing, eurozone manufacturing PMI
Asia: Manufacturing PMIs, Indonesia trade and CPI, India industrial production
Market Highlights
Markets will focus on the speech by BOJ Governor Ueda, which could prove market-moving with spillover effects across regional currencies. Investors will be looking for any signals on the timing of rate hikes, particularly after recent comments from BOJ board member Noguchi, who is considered dovish, suggesting that the central bank is getting closer to achieving its 2% inflation target. Over the weekend, Finance Minister Katayama said that recent yen volatility is not driven by fundamentals, although no specific intervention threshold was mentioned. Current market pricing indicates more than a 60% probability of a BOJ rate hike in December.
On the domestic front, Japan’s macro data continues to show resilience. Industrial production rose by 1.4%mom in November, while retail sales increased by 1.6%mom. The labour market also remained firm, with the jobless rate holding at 2.6%. Tokyo core CPI (excluding fresh food) held steady at 2.8%yoy in November, unchanged from October and slightly above Bloomberg consensus of 2.7%.
Meanwhile, markets await President Trump’s announcement of the next Federal Reserve Chair in the coming weeks. Treasury Secretary Scott Bessent has indicated a high likelihood that a successor to current Fed Chair Powell will be named before Christmas. Powell’s term is set to end in May 2026, and any early signals on leadership could influence expectations for US monetary policy going into 2026.
Regional FX
China’s official manufacturing PMI inched up to 49.2 in November from 49.0 in October, but it remained in contraction territory. Meanwhile, the services PMI slipped to 49.5 from 50.1, signalling contraction and reflecting the fading boost from October’s Golden Week holiday alongside persistent weakness in the real estate sector. Market attention now turns to the upcoming RatingDog PMI survey, which covers a broader range of companies than the official NBS survey. Despite the soft data, the US-China trade truce and the PBOC’s continued lowering of the USDCNY daily fixing have supported the yuan, which has appreciated about 3% against the US dollar since early April.
In the Philippines, political risks are escalating as street protests call for President Marcos’ resignation over a corruption scandal linked to publicly funded flood mitigation projects. Investor sentiment has deteriorated, but the 59.00 level for USDPHP remains a key resistance for now.