Article Highlights

  • Japan’s bank lending (y/y) increases by 2.6% vs. 2.4% uptick expected and previous
  • Japan’s current account balance clocks in at 1.80T vs. 1.48T surplus expected, 1.93T previous
  • NZ ANZ commodity prices slips from 3.2% to 0.7% in December
  • Japan’s Economy Watchers Sentiment jumps to 51.4 vs. 49.3 expected, 48.6 previous
  • Bitcoin plunges after Chinese authorities conduct “inspection” in Bitcoin exchange
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The Greenback continued to drop across the board after Trump’s first presser as President-elect failed to provide details market players were looking for.

Major Events:

Japan’s data dump – Data from the world’s third largest economy saw bank lending rising to 509.555 trillion JPY, 2.6% higher from a year ago in December. The growth figure exceeded November’s 2.4% growth and the 2.5% uptick that market players were expecting.

The current account balance also surprised to the upside, printing a surplus of 1.80T JPY in November. The figure is slightly weaker than October’s 1.93T JPY reading, but is stronger than the 1.48T JPY surplus that analysts had expected. It also marks the 29th consecutive month of surplus for the report.

We don’t have to look far for the reason for the surplus boost. See, the value of imports dropped by 10.7% while exports were only down by 0.8%. The value of oil imports also slipped by 14.4% in November, when average crude oil prices gained 3.3% from a year earlier to $49.08 per barrel.

Basically, the report hasn’t fully taken into account how much the yen has weakened since the month in question, when Trump won the U.S. Presidential elections. Expect to see the surplus dwindle in the next couple of months as the report prices in more of the yen’s weakness and the jump in crude oil prices.

Last but not the least is Japan’s economy watcher’s survey, which takes into account the workers whose jobs (and spending habits) are sensitive to economic trends. The index clocked in at 51.4 in December, inline with November’s reading (revised down from 52.5). Unfortunately, economic outlook came in at 50.9, below November’s 53.0 reading while current conditions remained at 51.4.

Bitcoin tumbles after PBoC inspection – Bitcoin traders huddle up! Earlier today officials from Shanghai’s city finance office as well as the Shanghai branch of the People’s Bank of China (PBoC) inspected the office of BTCC online bitcoin exchange.

According to the PBoC, they looked for evidence of violations, such as market manipulation or money laundering, and assessed the safety of customer funds. BTCC is expecting additional meetings with regulators this week.

Not surprisingly, the prospect of increased regulation and maybe even intervention from the PBoC pushed the cryptocurrency’s prices lower. The price of Bitcoin dropped to $759.60, the lowest since December 7, after already falling by as much as 16% in the previous session. Recall that Bitcoin just clocked in a record high of $1,161.89 last January 5.

Extended dollar selloff – With not a lot of data on the docket, Asian session traders extended the dollar’s selloff party from the previous trading session. As I mentioned in my U.S. session recap, Donald Trump’s first presser provided more information on a lot of things except what the markets want to hear about.

The lack of details over Trump’s tax and infrastructure spending plans sent the dollar even lower across the board.

Major Market Movers:

USD – The Greenback slid even lower during the Asian session, as more traders caught up to the dollar-selling party.

EUR/USD is up by another 33 pips (+0.31%) to 1.0611, GBP/USD recovered all of its intraday losses after dipping to 1.2169, and USD/CHF fell by 27 pips (-0.27%) to 1.0120.

JPY – The low-yielding yen was the biggest gainer of the session, thanks to better-than-expected Japanese data and a bit of risk aversion in the markets.

USD/JPY dropped by a whopping 97 pips (-0.84%) to 114.44, GBP/JPY fell by another 119 pips (-0.85%), and EUR/JPY plummeted by 64 pips (-0.52%) to 121.44.

Even the comdoll bulls went out to play with AUD/USD jumping by 18 pips (+0.24%) to .7464, USD/CAD falling by 37 pips (-0.28%) to 1.3131, and NZD/USD popping up by 25 pips (+0.35%) to .7079.

Watch Out For:

  • 8:45 am GMT: French final CPI expected to remain at 0.3%
  • 10:00 am GMT: Italian industrial production (0.2% expected, 0.0% previous)
  • 11:00 am GMT: Euro Zone industrial production (0.5% expected, -0.1% previous)

See also:

U.S. Session Recap
London Session Recap

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