USD/JPY traded higher today, towards 154.00. There was a slew of data releases from the country, and, on balance, the indicators were encouraging:
- PMIs improved (manufacturing did remain in contraction for the 6th month in a row though)
- Machine orders improved (a volatile data set though)
- The Tertiary Industry Activity Index (a service sector indicator) improved strongly
If you need a reminder, the Bank of Japan meets this week, on the 18th and 19th. The consensus is the bank will leave its interest rates on hold. Indeed, this seems to be a factor weighing on the yen right now. I do have to wonder at the the generally improving trend in Japanese data, though. The BoJ may well be wondering the same thing?
Apart from USD/JPY the USD weakened a little across the major FX board.
We received China property market data first, which showed China’s home price declines continued, but that prices fell the least in around one-and-a-half years. New home prices in 70 major cities fell -0.2% m/m, the smallest decrease in 17 months. Following this were the broader Chinese economic data, for November:
- industrial output growth quickened slightly in November
- retail sales, a gauge of consumption, disappointed, growing just 3.3% last month, much slower than a 4.8% rise seen in October and well under the predicted 4.6% expansion.
As I noted in the data post, the industrial production improvement was attributed to stimulus measures, but given borderline CPI deflation and lacklustre domestic demand, any stimulus aimed at increased production seems less than ideal (more production into weak demand will tend to weaken price growth further and tip China closer to consumer price deflation again). The weaker retail figures came despite a boost from major online shopping promotions and government-subsidised trade-in programs that improved sales in some sectors. China’s National Bureau of Statistics (NBS) spokesperson asserted that the trend of recovery in consumption has not changed and that officials would implement more policies to boost domestic demand.
Chinese equities fell on the session. In politics, South Korea’s President Yoon Suk Yeol was impeached.
*** Crypto was a star for the session, with Bitcoin surging to record highs above US $106,000.
This article was written by Eamonn Sheridan at
www.forexlive.com.
