Asian Session Recap – July 22, 2014

  • Japanese traders return from Monday holiday
  • RBA Stevens refrained from jawboning AUD
  • Chinese CB leading index up by 1.3% from previous 0.7%
  • Japanese all industries activity index showed 0.6% gain for May
  • Swiss trade balance, UK public sector net borrowing data due

Is risk appetite back on the table? Yen pairs chalked up a few gains in today’s Asian trading session, as Japanese traders returned from Monday’s holiday. USD/JPY continued its ascent since the previous U.S. trading session and reached a high of 101.56. EUR/JPY also had its share of gains as it traded roughly 30 pips above the 137.00 handle while AUD/JPY jumped to a high of 95.35.

The Australian dollar staged a relief rally over the past few hours, as RBA Governor Stevens refrained from talking down the currency in his latest testimony. Traders were on their toes and ready to short AUD had Stevens commented on how its strength could be damaging for exports. However, the central bank head decided to focus on the improvements and challenges in the Australian economy. Aussie pairs also drew support from the 1.3% increase in China’s CB leading index, which is an improvement from the previous 0.7% reading.

Japan printed an increase of 0.6% in its all industries activity index for May, better than the previous month’s reading. Take note though that the April figure was downgraded from -4.3% to -4.6%, indicating that the negative impact of the sales tax hike was worse than initially reported.

In the next few hours, the pound and the franc could steal the spotlight, as the U.K. will print its public sector net borrowing report while Switzerland will release its trade balance for June. U.K. could show a smaller public deficit of 10.3 billion GBP compared to the previous 11.5 billion GBP borrowing figure, reflecting a slight improvement in U.K. government finances. Meanwhile, Switzerland is expecting to see a larger trade surplus of 2.97 billion CHF from the previous 2.85 billion CHF.

See also:

U.S. Session Recap

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