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The yen was in Loserville today, as it took hits from weak Japanese report, strong NFP release, and overall risk appetite.

  • Japan’s bank lending (y/y) up by 3.3% in June vs. 3.2% growth in May
  • Japan’s core machinery orders down by 3.6% vs. 1.7% uptick expected, 3.1% dip in April
  • Japan’s economy watchers’ sentiment pops up to 50.0 vs. 49.0 expected, 48.6 previous
  • Japan posts current account surplus of 1.654T JPY vs. 1.796T JPY expected in May
  • China’s CPI (y/y) remains at 1.5% vs. 1.6% expected in June
  • China’s PPI (y/y) up by 5.5% as expected in June

Major Events/Reports:

Data releases from Japan

Data from Japan printed earlier today saw its current account dwindle down by 5.9% from a year earlier.

The world’s third largest economy still posted a current account surplus for a 35th month in a row, but this is the first time in four months that the economy’s goods trade balance showed a deficit.

A closer look points us to higher oil prices, which pushed imports higher by 15.8% to 5.84T JPY. This offset exports, which only rose by 12.9% to 5.71T JPY. Remember that Japan has had to import more oil since its nuclear power plant got hit in 2011.

Meanwhile Japan’s core machinery orders also disappointed with its 3.6% decline when market players had been expecting a 7.7% increase. This is bad news for the economy, which still relies heavily on manufacturing for its exports.

Data releases from China

Reports from the world’s second largest economy saw prices inching higher in June.

China’s annualized CPI came in at 1.5% for a second month in a row, which still marks the highest since January’s 2.5% growth. However, the monthly reading reflects a 0.2% contraction, which marks the deepest decline since March.

Meanwhile China’s producer prices saw an annualized increase of 5.5% which is around what market analysts had expected. The report declined by 0.2% if you look at the monthly data, but this time it represents the slowest contraction in the report’s three-month streak.

Overall, the reports were nothing to write home about, especially for monetary policymakers.

Post-NFP risk appetite

Asian session traders caught up to their U.S. counterparts as they priced in Uncle Sam’s relatively upbeat NFP report.

Forex Gump has the deets on that, but basically the latest jobs numbers, though mixed, caused enough optimism to push rate hike expectations higher this year.

USD/JPY led the pack and affected the other yen crosses while Asian bourses also saw gains.

Nikkei is up by 0.90%; Australia’s A SX 200 is up by 0.60%; Hang Seng is up by 1.03%, while the Shanghai index slipped by 0.21%.

Even the Black Crack received some lovin’ after last Friday’s U.S. crude production report caused another round of selloff for the commodity.

Brent crude oil advanced by 0.8% to $47.10 while U.S. crude oil prices is up by 0.8% to $44.59.

Major Market Mover(s):

JPY

The low-yielding yen received a triple roundhouse kick from weaker Japanese data, stronger-than-expected NFP report, and overall risk appetite in the Asian markets.

USD/JPY is up by 27 pips (+0.24%) to 114.16; EUR/JPY is up by 36 pips (+0.28%) to 130.19; CAD/JPY inched 20 pips higher (+0.23%) to 88.61, and GBP/JPY shot up by 37 pips (+0.25%) to 147.21.

Watch Out For:

  • 6:00 am GMT: Germany’s trade balance (20.3B EUR expected, 19.8B previous)
  • 8:30 am GMT: Euro Zone Sentix investor confidence (28.1 expected, 28.4 previous)