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On May 24, local time, Mohsen Rezaei, military advisor to Irans Supreme Leader, stated that Iran will respond "strongly and unprecedentedly" to any actions targeting the Strait of Hormuz or hostile forces entering the Persian Gulf, and will initiate countermeasures by breaking the maritime blockade. Rezaei also stated that if the current situation continues, one of Irans strategic options is to potentially withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). He claimed that this move would have "serious consequences" for the other side.On May 24, it was learned from the National Data Administration that my country is accelerating the research and formulation of technical standards for a nationwide integrated computing power network. There are already 12 related guiding technical documents, covering multiple aspects such as computing power monitoring and scheduling, computing-power collaboration, and security protection, to promote the optimal allocation of computing power resources nationwide.On May 24th, European Central Bank (ECB) Governing Council member Kocher stated that the ECB will face an interest rate hike next month unless a sustainable peace agreement is reached between the US and Iran. Eurozone inflation this year may be higher than previously expected, while countries are still grappling with previous price shocks. Meanwhile, the economy has shown considerable resilience. "There are always some extremely low-probability scenarios that could lead to different assessments of the situation, but currently, all indications suggest we will have to decide between maintaining interest rates and raising them," Kocher said. "And it is clear to me that if the situation does not improve, we will have to focus our discussions on taking action." He also stated that it is not appropriate to make any commitments now, and doing so would be meaningless. Uncertainty is high, so too many options should not be ruled out prematurely. Of course, positive developments are hoped for.On May 24, the Russian Ministry of Defense stated that the Russian military used multiple types of missiles, including the Hazel, Iskander, Kinzhal, and Zircon, as well as attack drones, to hit targets including Ukrainian military-industrial complexes, military infrastructure, the headquarters of the Army General Staff, the headquarters of the Main Intelligence Directorate of the Ministry of Defense, and other Ukrainian military command posts. No civilian facilities were planned or targeted.German Chancellor Merz: Russia has once again used the Hazel missile system to attack Ukraine. The German government strongly condemns this reckless escalation.

AUD/JPY bulls cheer China-inspired optimism; Japan data near 89.50 are mixed

Daniel Rogers

Dec 27, 2022 11:12

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The AUD/JPY pair creeps higher around 89.50 as bulls capitalize on the cautious Christmas market optimism. In doing so, despite the most recent dip, the cross-currency pair extends Friday's gains to hit weekly highs.

 

Nonetheless, the price increase may be linked to the risk-on market mentality, which was mostly driven by China, as well as lowering expectations of hawkish actions by the Bank of Japan (BOJ).

 

As on January 8, China no longer requires inbound travelers to undergo COVID quarantine. In addition to geopolitical concerns from Russia and North Korea, the news contributed to the market's cautious optimism. S&P 500 Futures advance intraday by 0.60 percent to 3,892, while 10-year US Treasury rates remain slow at roughly 3.74% as of press time.

 

After the central bank adjusted monetary policy last week, Governor Haruhiko Kuroda and Prime Minister Fumio Kishida of the Bank of Japan (BOJ) and Prime Minister of Japan (PM) Fumio Kishida, respectively, attempted to calm hawkish expectations. According to Kuroda of the BOJ, however, the broadening of the yield band is not a forerunner to an easy policy exit. In a similar spirit, Japanese Prime Minister Kishida ruled out the BOJ and government amending the central bank statement.

 

In terms of the facts, Japan's Unemployment Rate declined to 3.5% in November compared to the 3.6% predicted previously, while the Jobs / Applicants Ratio for the same month was 1.35 compared to the market prediction of 1.35. In addition, year-over-year growth in Retail Trade fell to 2.6% from 2.8% anticipated and 4.0% earlier.

 

A quiet schedule ahead of Saturday's official China PMIs and year-end market inaction will restrict AUD/JPY movement moving forward.