We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Mixed
More View more
Real Time News
  • Recession risk is back on the rise and largely attributable to expected economic impact from the #coronavirus outbreak. Get your market update from @RichDvorakFX here:https://t.co/NhzJHEqwj6 https://t.co/zY3kWFiys2
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.69%, while traders in USD/CAD are at opposite extremes with 71.27%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/AfHizYK5IA
  • Heads Up:🇳🇿 NZD Trade Balance 12 Mth YTD (JAN) due at 21:45 GMT (15min), Actual: N/A Expected: -3940m Previous: -4309m https://www.dailyfx.com/economic-calendar#2020-02-26
  • Heads Up:🇳🇿 NZD Trade Balance (JAN) due at 21:45 GMT (15min), Actual: N/A Expected: -533m Previous: 547m https://www.dailyfx.com/economic-calendar#2020-02-26
  • $GBPUSD Daily Pivot Points: S3: 1.2802 S2: 1.2893 S1: 1.2949 R1: 1.304 R2: 1.3074 R3: 1.3165 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Microsoft states supply chain is returning to operations at slower pace, doesn't see meeting third quarter personal computing outlook $MSFT
  • RT @IGSquawk: Crypto update: #Bitcoin 8789.12 -6.34% #Ether 228.04 -8.89% #Ripple (XRP) 0.2345 -8.36% #BitcoinCash 319.68 -10.35% #EOS 3.56…
  • SEC disapproves plan for bitcoin ETF on NYSE ARCA - BBG
  • Trump news conference on coronavirus pushed back to 6:30 PM - BBG
  • Majority of new cases now emerging outside of China - WHO
Japanese Yen Poised to Extend Gains as Risk Aversion Continues

Japanese Yen Poised to Extend Gains as Risk Aversion Continues

2010-07-30 05:07:00
Ilya Spivak, Sr. Currency Strategist
Share:

Key Overnight Developments

  • Japanese Employment, Manufacturing Figures Point to Slowdown
  • Australian Bank Lending Grows Least in Seven Months on Rate Hikes
  • Yen Outperforms as Carry Trades Follow Stocks Lower Overnight

Critical Levels

CCY

SUPPORT

RESISTANCE

EURUSD

1.3005

1.3107

GBPUSD

1.5569

1.5652

The Euro tracked lower overnight, down 0.2 percent against the US Dollar. The British Pound was little changed. We remain flat EURUSD and GBPUSD.

Asia Session Highlights

CCY

GMT

EVENT

ACT

EXP

PREV

NZD

22:45

Building Permits (MoM) (JUN)

3.5%

-

-9.5% (R+)

GBP

23:01

GfK Consumer Confidence Survey (JUL)

-22

-20

-19

JPY

23:15

Nomura/JMMA Manufacturing PMI (JUL)

52.8

-

53.9

JPY

23:30

Household Spending (YoY) (JUN)

0.5%

-0.9%

-0.7%

JPY

23:30

Jobless Rate (JUN)

5.3%

5.2%

5.2%

JPY

23:30

Job-To-Applicant Ratio (JUN)

0.52

0.50

0.50

JPY

23:30

Tokyo Consumer Price Index (YoY) (JUL)

-1.2%

-0.8%

-1.0% (R-)

JPY

23:30

Tokyo Consumer Price Index Ex Fresh Food (YoY) (JUL)

-1.3%

-1.2%

-1.3%

JPY

23:30

Tokyo Consumer Price Index Ex Food, Energy (YoY) (JUL)

-1.4%

-1.4%

-1.4%

JPY

23:30

Natl Consumer Price Index Ex Fresh Food (YoY) (JUN)

-1.0%

-1.1%

-1.2%

JPY

23:30

Natl Consumer Price Index (YoY) (JUN)

-0.7%

-0.7%

-0.9%

JPY

23:30

Natl Consumer Price Index Ex Food, Energy (YoY) (JUN)

-1.5%

-1.6%

-1.6%

JPY

23:50

Industrial Production (MoM) (JUN P)

-1.5%

0.2%

0.1%

JPY

23:50

Industrial Production (YoY) (JUN P)

17.0%

18.9%

20.4%

JPY

23:50

Loans & Discounts Corp (YoY) (JUN)

-4.1%

-

-3.5%

AUD

1:30

Private Sector Credit (MoM) (JUN)

0.2%

0.4%

0.5%

AUD

1:30

Private Sector Credit (YoY) (JUN)

2.8%

3.1%

2.7%

AUD

1:30

RP Data – Rismark Australia Median House Price (JUL)

465K

-

468K

JPY

4:00

Vehicle Production (YoY) (JUN)

25.9%

-

30.6%

JPY

5:00

Housing Starts (YoY) (JUN)

0.6%

1.8%

-4.6%

JPY

5:00

Annualized Housing Starts (JUN)

0.75M

0.76M

0.74M

JPY

5:00

Construction Orders (YoY) (JUN)

-10.2%

-

9.20%

Japan’s Jobless Rate rose to 5.3 percent – marking the fifth consecutive increase – while preliminary Industrial Production figures showed output unexpectedly slumped 1.5 percent in June and the Nomura/JMMA PMI gauge showed manufacturing activity slowed for the second month in July. The outcomes follow a disappointing set of trade figures released earlier this week, reinforcing expectations of a slowdown in Japan’s export-driven economic recovery as overseas demand falters.

Meanwhile, price growth figures printed in line with economists’ forecasts, with the Consumer Price Index down 0.7 percent in the year to June to show the pace of deflation has fallen to the slowest in 14 months. Stripping out volatile items like fresh food and energy however, prices fell 1.5 percent, showing deflation remains a very real concern and assuring an accommodative monetary policy for the foreseeable future. Furthermore, renewed economic slowdown would renew downward pressure on the price level, hinting CPI readings may begin to turn increasingly negative in the months ahead.

Perversely, the Japanese Yen actually outperformed on the dour economic data, rising against all of its major counterparts, as the Nikkei led the MSCI Asia Pacific regional benchmark stock index lower in overnight trade, dragging carry trades funded cheaply in the perennially low-yielding currency along for the ride.

Australian Private Sector Credit figures printed weaker than expected, adding 0.2 percent in June versus expectations for a 0.4 percent increase, marking the smallest increase in seven months. Slowing bank lending growth likely comes on the heels of the central bank’s aggressive tightening campaign. Indeed, a single rate hike can take as many as six months to be fully absorbed into the economy, hinting underlying monetary conditions will continue to become more restrictive despite an RBA that has been on hold since May and bolstering expectations that Glenn Stevens and company will shy away from further rate hikes for the remainder of the year.

Euro Session: What to Expect

CCY

GMT

EVENT

EXP

PREV

IMPACT

EUR

6:00

German Retail Sales (MoM) (JUN)

-0.2%

3.0%

Medium

EUR

6:00

German Retail Sales (YoY) (JUN)

1.0%

-2.4%

Medium

EUR

8:00

Italian Producer Price Index (MoM) (JUN)

0.3%

0.5%

Low

EUR

8:00

Italian Producer Price Index (YoY) (JUN)

3.6%

3.8%

Low

EUR

9:00

Italian Consumer Price Index (NIC inc tobacco) (MoM) (JUL P)

0.2%

0.0%

Low

EUR

9:00

Italian Consumer Price Index (NIC inc tobacco) (YoY) (JUL P)

1.5%

1.3%

Low

EUR

9:00

Italian Consumer Price Index - EU Harmon. (MoM) (JUL P)

-0.9%

0.1%

Low

EUR

9:00

Italian Consumer Price Index - EU Harmon. (YoY) (JUL P)

1.7%

1.5%

Low

EUR

9:00

Euro-Zone Unemployment Rate (JUN)

10.0%

10.0%

Medium

EUR

9:00

Euro-Zone Consumer Price Index Estimate (YoY) (JUL)

1.7%

1.4%

Medium

CHF

9:30

KOF Swiss Leading Indicator (JUL)

2.3

2.25

Medium

EUR

10:00

Italian Unemployment Rate (SA)

8.8%

8.7%

Low

A preliminary estimate of July’s Euro Zone Consumer Price Index is set to show the annual inflation rate rose to 1.7 percent, the highest since November 2008. However, as with Germany’s CPI report earlier in the week, the outcome may not prove market-moving considering its limited implications for monetary policy. Indeed, price growth remains below the central bank’s 2 percent target level and monetary conditions have actually turned more restrictive in recent weeks, meaning Jean-Claude Trichet and company are surely in no hurry tighten.

Although the money supply expanded for the first time in eight months in June, that outcome did not take into account July’s expiry of the ECB’s 12-month repo – a lending facility allowing European banks to secure access to the central bank’s funds for a year – which amounted to large liquidity drain and put upward pressure on short-term borrowing costs. Indeed, European 2-year yields overtook those of the US for the first time in three months at the beginning of this month and now trade at a 26bps premium, meaning Euro Zone monetary conditions are at their most restrictive since mid-February.

With borrowing costs set to push higher still as governments issue debt to finance their gaping deficits and economic growth likely to slow amid a lurch toward austerity, the path of least resistance for the ECB points toward (at least) a static posture, with the possibility of renewed easing seemingly far greater than that of tightening.Rounding out the data, the Euro Zone Unemployment Rate is set to hold unchanged at a record-high 10 percent for the fourth consecutive month in June while German Retail Sales slip 0.2 percent, a seemingly tame outcome considering receipts surged 3 percent – the most in three and a half years – in the previous month.

Turning to risk sentiment, US equity index futures are trading sharply lower, down 0.5 percent and hinting the Japanese Yen will extend against the spectrum of major currencies as risk appetite continues to evaporate.

For real time news and analysis, please visit http://www.dailyfx.com/real_time_news

To receive future articles by email, please contact Ilya at ispivak@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.