ForexLive Asia-Pacific FX news wrap: China’s sets GDP growth target for 2025 “around 5%”

• Trump confirms going to make efforts to increase US shipbuilding
• Trump: should get rid of chips act, tariffs will require period of adjustment
• Trump floats the idea of making interest payments on US-made cars tax deductible
• Recapping Bank of Japan dep gov Uchida - still hawkish
• China February Caixin Services PMI 51.4 (expected 50.8)
• BOJ Deputy Governor Uchida says if forecasts met the Bank will adjust policy further
• New York Times reports Trump signalled privately he'll stick with tariffs
• PBOC sets USD/ CNY mid-point today at 7.1714 (vs. estimate at 7.2575)
• China says it'll reduce Reserve Requirement Ratio at appropriate time
• China has suspended soybean import licenses for three US firms and halted US log imports
• China's finance ministry says it'll step up the pace of fiscal spending
• RBNZ Governor Orr resigns
• China says it'll keep the yuan exchange rate basically stable
• Lutnick tried to calm down tensions with Canada - report
• Australian Q4 2024 GDP +0.6% q/q (vs. expected +0.5%)
• Japan final February Services PMI 53.7 (prior 53.0)
• Trump administration readies order to bolster US shipbuilders and punish China - via WSJ
• New Zealand data - ANZ World Commodity Price Index +3.0% m/m (prior +1.8% in January)
• China says it'll target 2025 economic growth 'around 5%'
• US Commerce Secretary Howard Lutnick and Premier Doug Ford had a heated discussion Tuesday
• Goldman Sachs economists project that Trump's 25% tariffs likely to send inflation higher
• US tax - IRS planning on cutting up to half of its 90,000 employees
• EUR/USD is building on its gains, hits highest since early December
• RBA's Hauser says closely watching the trade war impact on inflation
• Australia Services PMI for February (final) 50.8 (prior 51.2)
• RBA's Hauser says measures of global trade uncertainty are at 50 year highs
• After-hours market volatility - chaotic, conflicting messages from Trump's administration
• Oil - private survey of inventory shows a headline crude oil draw larger than expected
• Fed's Williams says its likely that Trump's tariffs will drive inflation higher
• Lutnick: Trump may roll back Mexico-Canada tariffs tomorrow
• Forexlive Americas FX news wrap: Huge market moves after US tariffs on Mexico and Canada
• Trade ideas thread - Wednesday, 5 March, insightful charts, technical analysis, ideas

From China today we had a barrage of measures introduced into the National People’s Congress (NPC) for consideration. The NPC is China’s annual parliament that began meeting this week and will do so through March 11. The most important points to note:

• China’s GDP growth target for 2025 is once again “around 5%”
• the target for the urban unemployment rate around 5.5%
• CPI target around 2%, from 3% currently
• 2025 budget deficit at 4% of GDP
• 2025 national budget deficit at 5.66tln yuan
• 2025 quota on local government special bonds at 4.4tln yuan, up from 3.9tln in 2024
• Will adopt more proactive fiscal policy
• Will continue to implement appropriately loose monetary policy
• Will issue 1.3tln yuan ultra longterm special treasury bonds in 2025, up for 1tln in 2024
• Will allocate 300 Bln yuan from ultralong special treasury bonds to support consumer goods tradein schem (not the 800 bn that was widely touted)
• Will allocate 200 Bln yuan from ultralong special treasury bonds to support equipment upgrades programme in 2025

As I update Chinese equities are mixed, up in Hong Kong but the mainland is down. Moves are not large and could change as I type!

Reserve Bank of Australia Deputy Governor Hauser spoke today, emphasising the risks and uncertainties of the trade war. Hauser said that the Bank currently sees a very slow path ahead for rate cuts but a global growth (lower), and Australian CPI, impact from tariffs are risk factors to this.

Trump delivered his State of the Union address to a joint sitting of Congress. Of interest on the economy, in summary:

• wants to make interest payments on car loans tax deductible, only if the cars are made in the US
• confirmed reciprocal tariffs from April 2
• Says tariffs will create disturbance, will require a period of adjustment
• Wants to repeal the Chips Act
• Reiterates 25% tariffs for aluminum, copper, steel

Bank of Japan (BOJ) Deputy Governor Shinichi Uchida spoke. Uchida reaffirmed his hawkish stance, stating that the central bank will continue raising interest rates if its economic forecasts are met.

FX moves we relatively mild. Early in the session the USD continued to lose a little ground. EUR/USD hit its highest since the first week of December 2024. As the session progressed, and especially when Trump began speaking in Congress the USD drifted back up a little.

USD/JPY tracked a little higher on the day.