The
Reserve Bank of Australia increased its cash rate by 25bp at its
monetary policy board meeting today, vs. the +50bp rate hike that was
widely (though not unanimously) expected. In his accompanying
statement Governor Lowe said that the cash rate has increased
“substantially in a short period of time”. He went on to
say that slowing down the pace of rate hikes today gives the Bank an
opportunity to assess household spending, wages, inflation and global
economic developments to inform its path of rate hikes to come. It
appears now theat further hikes will be +25, no more +50s to come
from the RBA.

AUD/USD
fell on the announcement. As I update it has not followed through
lower though, having bounced back to be not a lot changed from
pre-announcement.

USD/JPY
dropped briefly on the news that North Korea had launched a missile
in the direction of Japan’s Hokkaido. The ballistic missile
overflew Japan and landed in the Pacific Ocean outside of Japan’s
Exclusive Economic Zone. North Korea launch ballistic missile tests
with some regularity, but today’s was the first to fly over Japan
since 2017.

USD/JPY
soon recovered its poise and has since moved higher on the session.

We
had data from Japan today, Tokyo area inflation (for September)
rising again, this time at its fastest since 1992 (excluding those
readings when the sales tax was raised).

Elsewhere,
major FX ranges have been relatively subdued. The absence of China
from markets has sapped some interest and flows in the region so far
for the week.