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Forex price action was pretty choppy across the board, as Asian session traders brace themselves for Yellen and Draghi’s speeches scheduled later today.

  • Japan’s national core CPI (y/y) up by 0.5% as expected vs. 0.4% increase in June
  • Tokyo’s core CPI (y/y) rises by 0.4% vs. 0.3% expected, 0.2% previous
  • Japan’s services producer price index up by 0.6% vs. 0.8% expected, 0.7% previous

Major Events/Reports:

Japan’s latest inflation numbers

Earlier today we saw that Japan’s consumer prices had risen for a seventh straight month in July.

According to Japan’s Statistics Bureau, prices had risen by another 0.4% from a year earlier in July, which matches market expectations. If you remove fresh food prices, then prices have risen by 0.5% from a 0.4% uptick in June and marks the fastest pace since March 2015.

On an annualized basis, food (+0.60%), fuel, light and water charges (+4.3%), and education (+0.4%) provided the biggest boost while furniture and household utensils (-0.4%) and housing (-0.2%) were the biggest drags.

Meanwhile, Tokyo’s core CPI, a widely-known leading indicator for Japan’s overall price trends, came in at 0.4% from a year earlier in August when market players had only expected a 0.2% increase.

So it looks like price trends are in favor of the BOJ, which is targeting a 1.1% inflation rate for 2017. It’s still a very long way to go, though, so market players were only cautiously optimistic.

All eyes on the Jackson Hole meetings

Sentiment improved among the Asian bourses as their U.S. counterparts calmed down in the previous session. Activity remained subdued, however, as traders prepare for major central bankers’ speeches during the U.S. session.

As mentioned in my previous updates, the Jackson Hole meetings are in full swing. We won’t see the crescendo until later today, though, when central bankers like Fed’s Janet Yellen and ECB’s Mario Draghi are scheduled to make speeches.

No one is really expecting major bombshells from the head honchos but market players are still on their toes for possible bread crumbs. Read Forex Gump’s trading guide for the event!

Despite the subdued trading session, Nikkei is still up by 0.61% to 19,472.00;
Australia’s A SX 200 is up by 0.08% to 5,749.80;
Hang Seng is up by 0.90% to 27,766.50, and
Shanghai index is up by 1.64% to 12,029.32.

Major Market Mover(s):

JPY

The low-yielding yen started the day on a weak note as traders priced in a bit of risk-taking, but soon gave up some of its losses on a round of prof-taking ahead of Yellen and Draghi’s speeches later today.

USD/JPY settled down to 109.57 after session hitting a high of 109.78;
EUR/JPY is down to 129.26 after reaching 129.51;
GBP/JPY is up by 8 pips (+0.06%) to 140.36 after reaching 140.59, and
AUD/JPY settled down at 86.57 after popping up to 86.70.

Watch Out For:

  • 7:00 am GMT: Germany’s final GDP (q/q) expected to remain at 0.6%
  • 9:00 am GMT: Germany’s IfO business climate (115.5 expected, 116.0 previous)