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With not a lot of fresh catalysts, Asian session market players ended up extending the risk-friendly environment seen in the London and U.S. sessions.

  • NZ visitor arrivals jump by 2.8% vs. 0.7% uptick in July
  • NZ credit card spending (y/y) up by 7.7% vs. 3.3% increase previous
  • Japan’s national core CPI (y/y) up by 0.9% as expected vs. 0.8% increase in July
  • Japan’s flash manufacturing PMI inches up from 52.5 to 52.9
  • Japan’s all industries activity steady in July vs. 0.2% expected, -0.9% previous

Major Events/Reports:

Japan’s inflation report

Looks like Kuroda and his team still have work to do!

Data from Japan printed earlier today saw core consumer prices rising by 0.9% from a year earlier in August. Though this is a bit faster than the expected 0.8% uptick, it’s also waaay lower than the Bank of Japan (BOJ)’s 2.0% target.

As if that’s not discouraging enough, only 49.3% of the core CPI components saw price increases from a year earlier. That’s the lowest percentage since November 2013!

Overall, today’s numbers underscore the challenge the BOJ faces in meeting its goals, and basically tells us that the central bank has not much incentive to take away its easy policies anytime soon.

More appetite for risk

With not a lot of fresh catalysts to rock the market boat, Asian session players took cues from the previous sessions’ moves.

If you recall, positive Brexit headlines and a stronger-than-expected retail sales report had boosted the pound, while speculations that the U.S.-China trade war won’t negatively affect the economy as much as expected boosted the London and U.S. markets.

The cherry on top of the Asian bourses’ gains was speculation that China will also increase its support to help the economy weather the trade war.

  • Nikkei is up by 0.90% to 23,886.9
  • A SX 200 is down by 0.06% to 6,188.8
  • Shanghai index is up by 0.98% to 2,756.008
  • Hang Seng is up by 0.93% to 27,733.5

In commodities, dollar weakness won over safe-haven appeal and boosted gold. Meanwhile, crude oil benchmarks extended their rallies despite Trump ordering OPEC to “get prices down now!” Maybe he should try asking nicely?

  • Gold is up by 0.13% to $1,208.90 per troy ounce
  • Brent crude oil is up by 0.11% to $78.73 per barrel
  • U.S. WTI is up by 0.13% to $70.23 per barrel

Major Market Mover(s):

JPY

The yen received a one-two punch from a weak inflation report (that points to extended easy policies from BOJ) and risk-taking during the trading session.

USD/JPY is up by 24 pips (+0.21%) to 112.72; EUR/JPY is up by 34 pips (+0.25%) to 132.81; GBP/JPY is up by 39 pips (+0.26%) to 149.60

AUD/JPY is up by 19 pips (+0.23%) to 82.21; NZD/JPY is up by 23 pips (+0.30%) to 75.41; CAD/JPY is up by 16 pips (+0.18%) to 87.32, and CHF/JPY is up by 27 pips (+0.23%) to 117.56.

Watch Out For:

  • 7:15 am GMT: France’s flash manufacturing PMI (53.3 expected, 53.5 previous)
  • 7:15 am GMT: France’s flash services PMI (55.2 expected, 55.4 previous)
  • 7:30 am GMT: Germany’s flash manufacturing PMI (55.7 expected, 55.9 previous)
  • 7:30 am GMT: Germany’s flash services PMI (55.1 expected, 55.0 previous)
  • 8:00 am GMT: Euro Zone’s flash manufacturing PMI to remain at 54.4?
  • 8:00 am GMT: Euro Zone’s flash services PMI to remain at 54.5 in September?
  • 8:00 am GMT: Euro Zone’s flash services PMI to remain at 54.5 in September?
  • 11:00 am GMT: BOE’s quarterly bulletin