ForexLive Asia-Pacific FX news wrap NVDA $5.5bn bombshell, China data solid, BOJ May hold? | Forexlive

• Federal Reserve Chair Powell speaks on the economic outlook today, Wednesday, April 16
• Morgan Stanley cuts outlook for China and Asia stock indexes
• China’s fighting words on Trump’s tariffs – world economic order has been severely damaged
• China Industrial Output March 2025 surges to +7.7% y/y (expected 5.8%, prior +5.9%)
• China Q1 GDP +1.2% q/q (expected +1.4%)
• Tesla’s plans to ship Cybercab & Semi electric truck parts from China to US suspended
• China March new home prices -0.08% m/m (prior -0.1%) and -4.6% y/y (prior -4.8%)
• PBOC sets USD/ CNY reference rate for today at 7.2133 (vs. estimate at 7.3272)
• Gold continues to surge, record high hit above US$3271
• Hong Kong suspends postal service for good bound for US – refuses to collect tariffs
• Australia March Westpac Leading Index – “softens as tariff chaos starts to weigh”
• US Treas Sec Bessent to meet South Korea’s fin min Choi next week to discuss trade issues
• ANZ raised its year-end forecast for gold price to $3,600 per ounce
• ANZ forecasts the RBNZ will cut its cash rate to 2.5% by October 2025
• Japan data: February Core Machinery Orders +1.5% y/y (expected -0.9%, prior +4.4%)
• Outlook for (US ) Empire State Manufacturing Survey to second lowest reading in 20 years
• U.S. plans to use tariff negotiations to isolate China (Wall Street Journal piece)
• Japan Reuters Tankan – Manufacturing index +9 in April from -1 in March
• JP Morgan says it turns bearish on base metals prices in the near-term
• Bank of Japan Governor Ueda says may need policy response to Trump tariffs
• Trump has launched a probe into the need for tariffs on critical minerals
• US government has indefinitely banned Nvidia from selling H20 chips to China
• US chip equipment makers calculate Trump tariffs could cost them more than US$1bn a year
• Moreon this: Fed independence fears continue to simmer amid Supreme Court labor board case
• ICYMI – BoA CFO says doesn’t believe we’ll see a recession
• Oil – private survey of inventory shows a headline crude oil build vs, draw expected
• Forexlive Americas FX news wrap 15 Apr: Another quiet day ahead of Chair Powell tomorrow.
• Trump says tariff pause because it’s a transition
• Trade ideas thread – Wednesday, 16 April, insightful charts, technical analysis, ideas

A bombshell Nvidia developments, better-than-expected Chinese economic data and a cautious Bank of Japan Governor were the highlights of the session. Those and the surging gold price.

An early most jarring development came from Nvidia, which said it will take a US$5.5 billion charge this quarter after the U.S. government imposed an indefinite ban on exports of its H20 chips to China. Part of new licensing requirements for sales to China and other nations. The news sent Nvidia shares sharply lower in after-hours trade, dragging down S&P 500 and Nasdaq futures.

Compounding the tech pressure, a Reuters report suggested that major three U.S. chip equipment makers each stand to lose around $350 million annually due to the Trump administration’s tariffs, while smaller players could also face millions in extra costs.

In monetary policy, Bank of Japan Governor Kazuo Ueda told Sankei that Trump’s tariffs have pushed the economy close to a BoJ ‘bad scenario’, warning that the central bank may need to respond if the impact worsens. While reiterating the BOJ’s data-dependence, he signaled a rate hike in May is now less likely (that’s my take on his remarks, you may find different), adding that both upside and downside risks to inflation are under close watch.

China’s Q1 GDP grew 5.4% year-on-year, matching the previous quarter and exceeding expectations. The surprise beat was accompanied by March data showing strong, much stronger than expected, retail sales and industrial output, though economists caution the full weight of U.S. tariffs has yet to be felt. Chinese officials are widely expected to unveil further stimulus measures in coming months to soften the blow and safeguard jobs.

On the Chinese currency front, the PBOC set the yuan reference rate at 7.2133, the weakest fix since September 2023. The damping today was once again greater than 1000 pips, the PBoC is still guiding CNY lower at a gradual pace.

• In the background, the Wall Street Journal reported the U.S. is pressing over 70 nations to limit transshipment of Chinese goods as part of its broader tariff strategy, underlining the widening scope of trade friction.
• Hongkong Post announced it will suspend acceptance of parcels containing goods bound for the U.S., after Washington scrapped duty-free treatment and raised tariffs on such items, effective May 2. The Hong Kong SAR government denounced the move as “bullying” and “abusive.”

Regional equity markets mostly remained under pressure, Japanese, mainland China, and Hong Kong indexes lower.

Major FX was characterised by a weaker US dollar on the session. EUR, JPY, GBP all rising. AUD, NZD and CAD lagged.

As I update USD/JPY has dropped back towards 142.50, down from above 143.25 earlier in the session. Governor Ueda’s hints aat a May pause not holding back the yen today at all today it seems.

Gold soared higher, another record high price his today: