The JPY has again made some gains during the Asian session, driven mainly by some worse-than-expected Chinese economic data.
- Chinese July industrial output +10.8% Vs +11.7% expected
- Chinese July CPI -1.8% YoY
- Exports from China are still in decline
- M2 grows fast in China due to stimulus spending
- Australian July business confidence rises 6 points
- BoJ leave rates on hold at 0.1% and stick with current policy
- Korea also leaves rates unchanged at 2%
- Regional stockmarkets were on average 0.25% higher
Fairly quiet session again in Asia but some slightly disappointing industrial output data out of China saw the JPY crosses pushed lower. USD/JPY opened above 97.00 but has quietly drifted south taking out some weak stops in the process. AUD/JPY was the biggest loser among the crosses despite some good business confidence data out of Australia. Cable tried to rally early as tight stops back above 1.65 were tripped but that momentum has also waned.
Dealers see some fairly heavy stops in the EUR/USD below 1.4080 and decent buying interest on the approach to 1.40. Light selling is noted around 1.4170/80 and again at 1.4220/30 with trailing stops above there. USD/JPY bids are expected around 96.30/35.
Markets: Nikkei +0.3%; HK +0.3%; Kospi +0.25%; Shanghai +0.25%. Oil $73/bbl. Gold $948/oz.
Ranges: EUR/USD 1.4124/58; cable 1.6450/1.6525; USD/JPY 96.56/97.12; AUD/USD .8322/77; EUR/JPY 136.43/137.21.
