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With not a lot of data on the docket, Asian session forex traders focused on the NFP report coming up in a few hours.

  • Australia’s Q4 2017 PPI up by 0.6% vs. 0.4% expected, 0.2% previous
  • Bitcoin breaks below $9,000 handle

Major Events/Reports:

Australia’s quarterly PPI report

Data from the Land Down Under showed factory gate prices rising faster in Q4 2017.

Producer prices rose by 0.6% for the quarter, which is better than the 0.2% gain in Q3 and the 0.4% uptick that analysts were expecting. This translates to a 1.7% annualized growth compared to the previous quarter’s 1.6% gain.

A closer look tells us that the increase was mainly due to petroleum refining and petroleum fuel manufacturing (+11.9%), heavy and civil engineering construction (+0.7%), and building construction (+0.4%).

Unfortunately for Aussie bulls, the currency failed to find support from the report. One possible reason is that traders are hesitant to take risks ahead of the monster NFP report due today.

Another busy day for the BOJ

Earlier today the Bank of Japan (BOJ) increased its planned purchase of JGBs maturing in 5-10 years from 410B JPY to 450B JPY. In addition, it also offered to buy an unlimited amount of 5-10-year notes two points above its 0.11% previous close.

The move came after JGB’s 10-year yields flirted with the 0.1%, which is apparently too hot for the BOJ’s target of dragging it to “around zero percent.”

The yen briefly dipped from the report, but it soon turned higher as other traders took profits from their higher-yielding bets.

Mixed risk appetite

The BOJ’s bond-buying spooked banking stocks and weighed on Nikkei for most of the day. China’s equities also took hits, while Australia’s stocks inched higher thanks to a positive PPI report.

  • Nikkei is down by 1.17% to 23,210.7;
  • Australia’s A SX 200 is up by 0.60% to 6,099.5;
  • Hang Seng is down by 0.01% to 32,640.1, and
  • Shanghai index is down by 0.41% to 3,432.82.

Even commodities were mixed, with oil prices maintaining their gains but gold prices getting dragged down by a recovery for the dollar.

  • Gold is down by 0.05% to $1,347.73;
  • Brent crude oil is up by 0.10% to $69.77, and
  • U.S. WTI is up by 0.11% to $66.03.

Major Market Mover(s):

AUD

The Australian dollar continued to slide against its counterparts as traders squared their higher-yielding bets ahead of today’s NFP report.

AUD/USD is down by 34 pips (-0.42%) to .8004;
AUD/JPY is down by 22 pips (-0.25%) to 87.72;
AUD/CAD is down by 30 pips (-0.31%) to .9828, and
AUD/CHF is down by 29 pips (-0.39%) to .7418.

NZD

The New Zealand dollar took more hits during the session thanks to disappointing New Zealand releases and a bit of dollar-buying ahead of the NFP report.

NZD/USD is down by 29 pips (-0.39%) to .7368;
NZD/JPY is down by 17 pips (-0.21%) to 80.73;
NZD/CHF is down by 24 pips (-0.35%) to .6827, and
NZD/CAD is down by 25 pips (-0.28%) to .9046.

Watch Out For:

  • 8:00 am GMT: Spain’s unemployment change (50.3K expected, -61.5K previous)
  • 9:30 am GMT: U.K.’s construction PMI (52.0 expected, 52.2 previous)
  • 10:00 am GMT: Euro Zone’s PPI (0.3% expected, 0.6% previous)
  • 10:00 am GMT: Italy’s preliminary CPI (0.3% expected, 0.4% previous)