Asian Session Forex Recap – August 5, 2016

  • AU AIG construction index slips from 53.2 to 51.6 in July
  • Japan’s average cash earnings up by 1.3% vs. 0.4% uptick expected, 0.1% decline in May
  • Japan’s leading indicators down from 99.7% to 98.4% vs. 99.6% expected

A pretty subdued day for the major currencies, as Asian session forex traders await the monster NFP report coming up. So what exactly happened during the Asian session?

Major Events:

Overall risk appetite – Asian session traders cheered the BOE’s stimulus plans, which helped boost not only equities but also commodity prices. Right now all eyes are on the NFP report coming up during the U.S. session. Read Forex Gump’s trading guide if you’re planning on sticking around for the event!

Jawboning from Japan – Government officials gave jawboning another go today, as the yen keeps its weekly gains ahead of the U.S. NFP report. If you recall, the yen gained HUNDREDS of pips against most of its counterparts a few days ago when the BOJ and Abe’s stimulus announcements underwhelmed the markets.

Finance Minister Taro Aso hit the newswires today, saying that the government plans to work closely with the BOJ. Then, Economy Minister Ishihara said that the government is watching forex moves closely even as he denied that they’re not considering using helicopter money.

Finally, Ministry of Economy, Trade and Industry Minister Hiroshige Seko hinted that they’re looking at the impact of strong yen on corporate CAPEX plans. Unfortunately (but expectedly), the jawboning had no noticeable effect on the yen.

Major Market Movers:

AUD – Thanks to a not-so-revised quarterly statement from the RBA, rise in iron ore prices, and overall risk appetite, the Aussie gained ground against its counterparts.

AUD/USD jumped by 29 pips (+0.38%) to .7659, AUD/JPY shot up by 30 pips (+0.39%) to 77.51, and EUR/AUD fell by 54 pips (-0.37%) to 1.436.

JPY – The yen lost a couple of pips against the comdolls but stood its ground against the dollar and the European currencies.

USD/JPY, EUR/JPY, and GBP/JPY ended the session less than 5 pips away from their open prices but NZD/JPY inched 12 pips higher (+0.17%) to 72.75 and AUD/JPY rose by 30 pips (+0.39%) to 77.51.

Watch Out For:

  • 6:00 am GMT: German factory orders (0.5% expected, 0.0% previous)
  • 6:45 am GMT: French trade balance (-3.9B EUR expected, -2.8B EUR previous)
  • 7:00 am GMT: Switzerland foreign currency reserves
  • 7:30 am GMT: U.K. Halifax house price index (-0.1% expected, 1.3% previous)
  • 8:00 am GMT: Italian industrial production (0.3% expected, -0.6% previous)

See more:

U.S. Session Recap

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