• USD enjoys another strong day in Asia
• USD/JPY reaches new 6-month high
• EU-Japan trade deal now heading for respective parliaments

The USD enjoyed another strong day in Asian trading yesterday, building on Tuesday’s strength that was driven by Fed Chairperson Jerome Powell’s testimony on monetary policy before the US Senate, as well as strong US industrial data.

The USD/JPY reached a new 6-month high above 113. The GBP and the EUR remained on the defensive because of more Brexit uncertainty and monetary policy divergence.

Asian markets traded moderately stronger, led by an upsurge in Japanese indexes. Gold prices continued their consolidation period near their lowest level for the year at $1226, while Treasury yields were firmer as Fed Chair Powell entered his second day of testimony before Congress.

According to Bloomberg, the Trump government plans to investigate uranium imports, which might cause more border tariffs on the grounds of national security.

Meanwhile, Reuters reported that US Defense Secretary James Mattis is prepared to hold discussions with Russian Defense Minister Sergei Shoigu – something that hasn’t happened since 2015.

Perhaps more importantly, the huge EU-Japan trade deal that has been negotiated over the past four years will now be considered by the EU and Japanese parliaments. It is not expected to run into any problems during approval.

Kansas Federal Reserve President Esther George, widely regarded as a dove, commented on the outlook for US rate hikes.

Asian stocks, meanwhile, continued their gains yesterday after Jerome Powell’s remarks on Tuesday. These markets reacted positively to his bullish sentiments, although Chinese indices remained rather subdued.

South Korean Finance Ministry Director General Do Kyu-sang said that he expects the 2018 growth rate to come in at 2.9% rather than the 3% that was forecast earlier in the year.