USD/JPY found reasonable buying support in the early going, bids around 81.80 holding again. It looked set to be another range-bound sort of day until into the Tokyo lunchtime it rallied sharply. EUR/JPY stops were taken out above recent highs, seemingly driven by comments from the BOJ’s Nishimura earlier in the day (see here and here). The comments were nothing new, but seemed to have the desired effect of triggering Yen longs to further liquidate.
China stocks, too, rallied hard, again on comments that were not overly different to what we hear quite often: the economy to grow >8%. There were rumours of a further China stimulus package but nothing at all crossed reputable newswires about this (late in the day there was one headline about the CIRC lifting limits on insurers investments into banks). The Shanghai composite was well overdue for some love, a strong factor in the sharp bounce.
Economic releases today:
- Australia Nov. AIG Services PMI 47.1 (vs. 42.8 for October) – big improvement but still in contraction territory
- UK Nov. Shop Price Index (a guide to inflation) subdued at 1.50% (vs. 1.47% prior)
- Australia Q3 GDP came in below expectations at +0.5% qoq (vs. expected of +0.6%) – the announcement was followed by comments from Australian Treasurer Wayne Swan (here, and here)
- China Nov. Services PMI at 52.1, a weaker performance than the Oct result of 53.5
- Late in the day, this headline crossed the newswires: “China lifts limits on insurers’ investment in banks: CIRC says”
- RBA Deputy Governor Lowe is scheduled to speak at an event at 0700GMT
The Yen was the big mover today. AUD had a range-bound day. GBP and EUR, though, performed well (EUR more so than GBP). Both were bought against the Yen as stops triggered higher. The EUR/USD went into (very) early Europe just off its highs of 1.3124, while Cable got as high as 1.6119.
