investingLive Asia-Pacific FX news wrap: Kiwi $ tailwind from improving data

Markets were subdued as traders awaited the full resumption of trading in the US after the holiday. Positive data from New Zealand showed that the services sector returned to expansion, with the PSI rising to 51.5, which has supported the NZD and extended gains for the AUD. This improvement follows last week's rebound in manufacturing PMI, indicating signs of economic stabilization. Meanwhile, Japan's bond markets are under pressure as the yield on the 40-year government bond reached 4%, the highest since its debut in 2007 and the first time any Japanese sovereign yield has reached this level in over 30 years. This movement reflects concerns over public finances, particularly amid proposals to cut the food sales tax. In China, the PBOC held its one- and five-year loan prime rates steady, reinforcing the preference for targeted easing tools. The USD/CNY reference rate was set at its strongest level for the yuan since May 2023, leading to a fall in USD/CNH shortly after the fix. Geopolitical developments are also in focus, with reports of China purchasing around 12 million tonnes of US soybeans, satisfying a key trade pledge outlined by the Trump administration. Overall, major FX pairs traded in a relatively subdued manner, but the underlying bullish sentiment for NZD and AUD remains due to the improving economic data.