Opening Comment 03.12
New Zealand retail sales have been released and are on the whole weaker than expected, following a downward revision to the previous month, and some weaker retail sales ex-autos. Japanese industrial production and capacity utilization numbers have come out solid, but fail to materially influence price action.
MOF Kan has been on the wires saying that although the recent GDP data shows the improvement in the economy, it is not yet a self-sustainable recovery. More importantly, on the topic of the Yen, Kan says that officials will let the market decide the Yen’s value as long as moves are stabilized, but does not rule out intervention on rapid moves. PM Hatoyama takes things a step further by coming right out and saying that good measures need to be taken against Yen strength. Although currencies have not moved that much on Friday, the Yen does stand out as the weakest major currency, while the Yen crosses are also showing well bid.
Looking ahead, the calendar is light in European trade, with the only key releases coming from German wholesale prices (0.3% expected) at 7:00GMT, and Eurozone industrial production (0.7% expected) at 11:00GMT. US equity futures point to a slightly lower open, while commodities are mildly bid for the time being.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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