Yen Mildly Higher After Batch Of Weak Data
ActionForex | Jul 31, 2015 03:19AM ET
Asian markets are stuck in tight range after US stocks closed nearly flat overnight. Yen is mildly higher after a batch of weak data from Japan. National CPI rose slightly by 0.1% yoy in June versus expectation of 0.0%. But Tokyo CPI dropped -0.1% yoy in July versus expectation of 0.0% yoy. Recently, BoJ stayed optimistic that inflation will pick up again towards its 2% target later. But currently, the data showed little progress in achieving this. Doubts remained among economists on whether BoJ could achieve the target at all without additional monetary stimulus. Also from Japan, unemployment rate rose to 3.4% in June versus expectation of 3.3%. Household spending dropped -2.0% yoy in June versus expectation of 1.9% yoy.
Also released in Asian session, Australia PPI rose 0.3% qoq, 1.1% yoy in Q2. New Zealand NBNZ business confidence dropped sharply to -15.3 in July. The Australian dollar is set the to be the worst performing major currency this month. That's even weaker than Canadian and New Zealand dollar in spite of rate cut from BoC and RBNZ. AUD/NZD faced strong resistance from long term fibonacci level of 1.3793 to 1.0016 at 1.1459 and pulled back. The dip was so far contained by 1.0886 resistance turned support and thus maintained the medium term bullish outlook. Nonetheless, more sideway trading could be seen first with an upside breakout mildly in favor. That is, the Aussie might regain strength against Kiwi at a later stage.
Elsewhere, UK Gfk consumer sentiment dropped to 4 in July. German retails sales will be released in European session. But focus would be on Eurozone CPI and unemployment. From US, employment cost index and Chicago PMI will be featured. Canada will release GDP.
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