Asian Session Recap – April 30, 2014

  • BOJ keeps monetary policy unchanged as expected
  • BOJ expects inflation to keep rising this year
  • Japanese housing starts down by 2.9% y/y
  • German retail sales and French consumer spending data due
  • Euro zone CPI to revive deflation fears?
  • Swiss KOF economic barometer and UBS consumption indicator to improve?

Looks like price action is heating up in the forex market, and the trading day ain’t over yet! Yen pairs showed some excitement ahead of the BOJ interest rate decision, but the central bank decided to keep monetary policy unchanged for the meantime. In their press conference, policymakers reiterated their forecast that inflation will keep rising this year and eventually hit their 2% target sometime in 2015.

Data from Japan, however, painted a bleaker picture. Housing starts showed a 2.9% annualized decline, slightly worse than the estimated 2.8% drop. Earlier today, the preliminary industrial production figure also fell short of consensus and the official manufacturing PMI fell into the contractionary zone.

The euro might take center stage in the next few hours, as Germany and France gear up to release their consumer spending reports. Also due from the euro zone is the Spanish preliminary GDP reading and the region-wide CPI, which is expected to come in at 0.8%. Bear in mind though that inflation figures from most major economies have disappointed lately and that a poor CPI result from the euro zone might revive deflation fears, spurring talks of negative deposit rates or further easing from the ECB.

Do watch out for Switzerland’s UBS consumption indicator and KOF economic barometer releases as well. Strong results could allow the franc to rebound against the dollar, but it remains to be seen how forex pairs could fare ahead of the major events in the U.S. session later on! Good luck and good trading!

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U.S. Session Recap

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