• Japan industrial output -2.6% vs -0.8% exp
  • Japan household spending -3.2% y/y vs -1.1% exp
  • Japan retail sales -2.3% vs +0.1% exp
  • Japan unemployment 4.5% and core national CPI -0.2% y/y, both as expected
  • US Treasury refrains from naming China a manipulator, takes issue with Japanese intervention
  • Japan responds, says it will not change FX intervention stance
  • Japan likely to raise consumption tax to 10% from 5%, local press

I hoped the round of Japanese data and the return of Australian markets would bring back liquidity and spark some trading but that didn’t appear to be the case. The range in EUR/USD was a measly 14 pips with the market now slipping to the bottom end at 1.3063.

The yen was the general outperformer as local stock markets declined. Adding to the yen pressure was the US FX manipulation report, which raised questions about future intervention. The weak Japanese data also pointed to the growing threat of a global slowdown.

One exception was NZD, which jumped 25 pips only to later give back most of the gains.