Asian Session Recap – Sept. 9, 2014

  • Japanese tertiary industry activity flatlined again in July
  • Japan’s consumer confidence index down from 41.5 to 41.2
  • Japanese preliminary machine tool orders at 35.6% from 37.7%
  • Nikkei closed 0.28% higher for the day
  • Australia’s NAB business confidence index down from 10 to 8
  • Australian home loans up by 0.3% vs. 1.1% estimate
  • U.K. manufacturing production and trade balance due
  • BOE Governor Carney to testify today

It ain’t over ’til the Greenback says so! The U.S. currency extended its gains against most of its major forex counterparts in today’s Asian trading session, pushing USD/JPY to a high of 106.35 and EUR/USD to a low of 1.2866 as of this writing. GBP/USD has been unable to close its weekend gap, as the pair inched below the 1.6100 handle in the past few hours.

Data from Japan was mostly weaker than expected, with tertiary industry activity showing another flat reading for July. Consumer confidence reflected increased pessimism, as the index fell from 41.5 to 41.2, while preliminary machine tool orders showed a decline from 37.7% to 35.6%. Despite that, the Nikkei closed with a 0.28% gain as investors are starting to price in more stimulus from the BOJ sooner or later.

Data from Australia was weak as well, with home loans posting a mere 0.3% gain instead of the estimated 1.1% rise and the NAB business confidence index dropping from 10 to 8. AUD/USD broke below the .9300 major psychological level and traded to a low of .9251 before bouncing while AUD/JPY is stuck below the 98.50 level.

Pound pairs might see extra volatility in the next few hours, as the U.K. gears up to print the latest manufacturing production and trade balance data. Another 0.3% uptick in manufacturing production is eyed for July while the trade balance might show a smaller deficit of 9.1 billion GBP from the previous 9.4 billion GBP shortfall. Stronger than expected data could allow the pound to recover some of its recent losses while bleak figures could push the U.K. currency lower.

Do stay tuned for BOE Governor Carney’s speech at 11:45 am GMT also, as he might provide clues on what the U.K. central bank has up its sleeve. Bear in mind that the BOE decided to keep monetary policy unchanged in their latest rate statement and Carney might shed more light on whether or not policymakers have shifted to a more dovish stance. His thoughts on the potential independence of Scotland might also have an impact on pound movement.

See also:

U.S. Session Recap

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