Asian Session Recap – Sept. 30, 2014

  • Japanese household spending down by 4.7% y/y vs estimated 3.5% decline
  • Japanese preliminary industrial production dropped by 1.5% in Aug
  • Japan’s unemployment rate improved from 3.8% to 3.5% in Aug
  • Japanese average cash earnings up by 1.4% y/y
  • Japanese retail sales up by 1.2% y/y vs. estimated 0.4% uptick
  • Chinese HSBC final manufacturing PMI for Sept downgraded from 50.5 to 50.2
  • German retail sales and French consumer spending data due

The yen managed to stay afloat despite mixed economic data from Japan, with USD/JPY retesting the forex area of interest around 109.25 after the results were released. GBP/JPY is still moving sideways around 177.75 while EUR/JPY retreated to a low of 138.66.

Japanese household spending was weaker than expected, as it showed a 4.7% annualized decline versus the projected 3.5% drop, while the preliminary industrial production report showed a 1.5% drop for the month of August. Meanwhile, the jobless rate improved from 3.8% to 3.5% and average cash earnings saw a stronger than expected 1.4% annualized gain. Retail sales also came in better than expected, as it chalked up a 1.2% year-over-year increase, higher than the projected 0.4% uptick.

The dollar retreated from its recent forex rallies, as AUD/USD jumped around 50 pips to a high of .8768, despite the downward revision in China’s HSBC manufacturing PMI for September. The reading was lowered from 50.5 to 50.2, indicating that industry expansion was weaker than initially reported. NZD/USD recovered above the .7800 handle while USD/CAD is struggling to stay above 1.1150.

GBP/USD is still pacing inside its 40-pip forex range but might see a breakout later on, as the U.K. will print its current account balance, Nationwide HPI, and final GDP reading. EUR/USD could also see more movement, with the German and French consumer spending reports due. Also due from the euro zone are the flash CPI estimates, which might stay unchanged from their previous readings. Watch out for weaker than expected reports which might lead to a fresh round of selling!

U.S. Session Recap

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