- NZ manufacturing sales rises by 0.8% in Q4 2016 vs. 1.1% growth in Q3
- Japan’s final GDP revised higher from 0.2% to 0.3% in Q4 2016
- Japan’s bank lending (y/y) up by 2.8% in February vs. 2.5% uptick in January
- Japan’s current account surplus slips from 1.66T JPY to 1.26T JPY in January
- Japan’s final GDP price index (y/y) slips by 0.1% as expected
- China posts trade deficit in February
- Japan’s Economy Watchers Sentiment down from 49.8 to 48.6 in February
- Japan’s leading indicators rises from 104.8% to 105.5%
The yen gained pips across the board thanks to a bit of risk aversion and an upward revision to Japan’s Q4 2016 GDP. Here’s what Asian session forex traders were up to!
Japan’s Q4 GDP is revised higher – Earlier today, Japan’s Q4 2016 GDP was revised higher from 0.2% to 0.3%, which is in line with Q3’s growth. This translates to an annualized expansion of 1.2%, which is higher than the preliminary 1.0% reading. What’s more, it also marks the fourth consecutive quarter of growth, the longest streak for the economy in more than three years. Wowza!
A closer look tells us that capital expenditure led the upward bump, with expansions in exports and government spending not far behind. Business investment (capex) shot up by 2.0% – its fastest rate in three years – against earlier estimates of a 0.9% increase and added 0.3% to the GDP.
Trade activity also contributed 0.2%, as exports expanded by 2.6% while imports rose by 1.3% (its first growth in a year). Last but not the least, government spending maintained its 0.3% growth from the preliminary estimates.
What’s concerning market players is the fact that private consumption remains weak. It was flat in Q4 2016 after showing 0.3% growth in Q3 and made no contribution to the GDP. For newbies out there, you should know that the BOJ is trying to boost consumer spending, as it remains one of the best ways to reach their inflation targets.
China posts trade deficit in February – The world’s largest trading economy posted a trade deficit in February, its first in three years, as imports outpaced exports during the Lunar New Year holidays.
According to the General Administration of Customs, yuan-denominated imports rocketed by 44.7% from a year earlier in February, while exports only ticked 4.2% higher during the same period. This left the economy with a trade deficit of 60.63B CNY for the month.
While currency fluctuations, higher commodity prices, and Lunar New Year activities might have influenced China’s trade numbers, the upbeat readings still hint that the world’s second largest economy is off to a good start for the year even as the government had toned down its growth rate expectations from the previous year.
As of writing, the agency has yet to publish its USD-denominated figures, which is more widely used by market analysts.
JPY – Jitters ahead of this Friday’s NFP release and a bit of risk aversion in the markets boosted the low-yielding yen across the board.
USD/JPY is down by 35 pips (-0.31%) to 113.69, AUD/JPY is down by 15 pips (-0.17%) to 86.38, EUR/JPY is down by 38 pips (-0.32%) to 120.12, and GBP/JPY is down by 34 pips (-0.24%) to 138.80.
- 7:00 am GMT: German industrial production
- 7:45 am GMT: French trade balance (-3.7B EUR expected, -3.4B EUR previous)
- 8:15 am GMT: Switzerland’s CPI (0.2% expected, 0.0% previous)
- 12:30 pm GMT: U.K.’s annual budget release
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
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