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With not a lot of economic data on the docket, Asian session forex traders tuned in to central banker speeches today.

  • Japan’s flash manufacturing PMI dips from 52.4 to 52.2 in July
  • Lack of fresh data led to risk aversion and caution ahead of FOMC event

Major Events/Reports:

Japan’s manufacturing PMI

Data printed earlier saw manufacturing activity in the world’s third largest economy growing at a slower pace in July.

The earliest available indicator for Japan’s manufacturing sector clocked in at 52.2 in July, which is a tad lower than its 52.4 reading in June.

A closer look tells us that weaker export demand from South East Asia weighed on both orders and output. The industry continued to provide jobs, however, with the employment sector increasing at a faster rate during the month.

Overall risk aversion

Asian bourses (and the dollar) struggled to find traction today as a lack of fresh economic reports turned the market’s focus to other concerns.

Demand for higher-yielding currencies took hits on doubts that the ECB would start to plan to taper its QE program in September.

Of course, it also doesn’t help that the schedule of the Trump administration’s fiscal stimulus has been pushed back by the failure of the GOP’s healthcare Bill while profit-taking ahead of this week’s FOMC statement also kept other traders in the sidelines.

Nikkei, which lamented a weaker USD/JPY, dropped by 0.87% to 19,925 while Australia’s A SX 200 is also down by 0.72% to 5,681.40. Meanwhile, strong local stocks performances kept the Shanghai index (+0.56%) and Hang Seng (+0.52%) buoyed at 11,874.47 and 26,844.00 respectively.

Major Market Mover(s):

JPY

Concerns for USD/JPY bled over to the rest of the yen crosses as traders await this week’s FOMC statement.

USD/JPY is down by 18 pips (-0.16%) to 110.94, EUR/JPY is down by 14 pips (-0.11%) to 129.49, and CHF/JPY is down by 25 pips (-0.21%) to 117.27.

Watch Out For:

  • 7:00 am GMT: France’s flash manufacturing PMI (54.6 expected, 54.8 previous)
  • 7:00 am GMT: France’s flash services PMI (56.6 expected, 56.9 previous)
  • 7:30 am GMT: Germany’s flash manufacturing PMI (59.1 expected, 59.6 previous)
  • 7:30 am GMT: Germany’s flash services PMI (54.4 expected, 54.0 previous)
  • 8:00 am GMT: Euro Zone’s flash manufacturing PMI (57.3 expected, 57.4 previous)
  • 10:00 GMT: Germany’s Bundesbank monthly report