Asian Session Recap – Aug. 13, 2014

  • Japanese economy contracted by 1.7% in Q2 2014
  • Nikkei up by 0.35% for the day
  • BOJ minutes show policymakers’ concerns about exports
  • Australia’s Westpac consumer sentiment index up by 3.8% in July
  • Australian wage price index showed 0.6% q/q gain vs. 0.8% consensus
  • Chinese retail sales weaker than expected at 2.2% vs. 2.5% y/y
  • Chinese industrial production up by 9.0% as expected
  • Euro zone industrial production to rebound?
  • U.K. claimant count change and BOE inflation report due

Yen pairs saw a lot of action in today’s Asian trading session, as the Japanese economy released its Q2 GDP reading while the BOJ printed the minutes of its latest policy meeting. The quarterly GDP report showed that the economy contracted by 1.7% as expected, pushing the yen lower against most of its counterparts.

USD/JPY jumped to a high of 102.31 after the release while EUR/JPY made an upside break from consolidation to a high of 136.75. GBP/JPY is also crawling higher as it made a rally past the 172.00 major psychological mark.

The minutes of the latest BOJ meeting confirmed that policymakers are getting increasingly concerned about Japan’s export industry. There was also opposition from some members regarding the economy’s chances of hitting the 2% inflation target, leading to speculations that easing is still possible if Japanese data continues to disappoint. Despite that, the Nikkei managed to chalk up a 0.35% gain for the day.

Data from Australia was mixed, as the Westpac consumer sentiment index marked a strong 3.8% gain while the quarterly wage price index showed a weaker than expected 0.6% increase. Data from China was also mostly weaker than expected, with retail sales and industrial production falling short of expectations. AUD/USD remained resilient as the pair popped close to the .9300 handle while AUD/JPY has broken past 95.00.

The pound might be in for a wild ride in the next few hours, as the U.K. will release its claimant count change report and the BOE inflation report. A slower decline in joblessness is expected but this might be enough to bring the U.K. jobless rate down from 6.5% to 6.4% in July. Weaker than expected results, however, could lead to more losses for the pound, especially if the BOE inflation report reflects downgrades in growth and inflation forecasts.

Also due today is the euro zone industrial production report, along with a few underlying inflation figures from Germany. Lower than expected figures could keep euro rallies at bay while weak data could push the shared currency lower. Good luck and good trading!

See also:

U.S. Session Recap

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