Forex Today

Yen higher on BOJ tankan and risk aversion amid Asia stock falls, with players looking ahead to U.S. ISM manufacturing data; USD/JPY at 105.75 late, EUR/JPY at 166.65, EUR/USD 1.5759. Tankan large manufacturers' DI at 5 vs 11 in March survey but better than 3 reading tipped; DI for large non-manufacturers 10 vs 12 in March, 9 tipped. Companies expect conditions to worsen in coming months, though plan to lift capex 2.4% for fiscal year vs 1.6% decrease forecast in March. Data viewed as confirming a slowing economy with BOJ likely on hold for while; Economy Minister Ota said economy needs careful monitoring, Finance Minister Nukaga said economy is in lull.

AUD down after RBA stood pat, as tipped, delivered somewhat more neutral statement. USD/Asians mostly higher on weakness in regional shares, though U.S. stock futures mildly higher with Lehman +3% after-hours as Morgan Stanley started it at Overweight; some pointed to still-high oil price, WSJ story quoting analysts as saying UBS likely to issue profit warning for 2Q (UBS news so far today has been about corporate governance rules). Nikkei off 0.1%, Aussie shares off 1.3%, Kospi off 0.5%, Taiwan down 1.5% at 16-month low, Shanghai Composite down 2%. HK, Thai markets shut. BOK revised down Korea GDP growth call for 2008 to 4.6% from 4.7% while expecting pickup in inflation in 2H, for 2008 inflation rate of 4.8% vs 3.3% earlier estimate; forecasts current account gap of $9 billion this year. June trade gap $284 million vs $545 million deficit expected, $900 million surplus in May; Korea exports +17% Y/Y, imports +32.3%; CPI +5.5% Y/Y vs 4.9% in May, 5.4% tipped. Australian Chamber of Commerce & Industry/SAI Global index of national economic conditions a seasonally adjusted 57.4 points in 3 months through June vs 61.6 in 1Q08. Nymex crude oil +56 cents on Globex.