Another day, another blow to the rational markets hypothesis in Asia – although to offer some justification the moves do seem to be motivated by expectations of an imminent September rate increase in the US, in the wake of relatively robust jobs data yesterday.
Chinese CPI came in higher than expected, but it is food price driven (pork). This limits the global read through. China has very little weight in other countries' CPI, and it does not export food. Foreign central banks are now permitted to purchase onshore assets, as part of the drive for RMB international status.
Japanese prime ministerial adviser Yamamoto is suggested that October is a lovely month for central bank policy easing, and an extra JPY10tn of bond purchases would be a nice round sum to ease by. Of course, in theory the Bank of Japan is independent.
The Bank of England dumps information into the markets today (meeting decision and minutes). The last vote was 8:1 against the rate hike – since when the manufacturing data has weakened, but the consumer remains alive and well and happy to borrow.