Asian Session – Yen lifted as Japan’s inflation accelerates
January 31, 2014 7:47 am
The yen was in focus today as it gained strength following some positive news out of Japan. The country’s core inflation rate accelerated more-than-expected to a 5-year high in December. This was good news for a country grappling deflation, which the Bank of Japan has fought in the past year with aggressive monetary policy.
Japan’s core CPI (which excludes fresh food but includes energy costs), rose 1.3% in December compared to a year ago. The dollar was pushed lower by the stronger yen, losing 0.22% to 102.47. Trading was slow in Asia as a number of countries were observing to the Lunar New Year holiday.
The greenback was otherwise stronger elsewhere, as Thursday’s US GDP print helped boost it higher. The US economy grew at a 3.2% rate in the last three months to December, with exports and household spending playing a large role in contributing to the increase.
The euro remained weak in Asia, after a big drop against the dollar yesterday on disappointing German inflation data. The weaker CPI from Europe’s largest economy raises concern over how the overall Eurozone CPI numbers will come out later today. Any signs of deflationary pressures could push the European Central Bank to take action.
The euro lost 0.13% during the Asian session to end at a 1-week low of 1.3538, moving off Thursday’s high of 1.3664. The Eurozone CPI data due at 1000 GMT will be a key risk event for the euro. Forecasts are for a 0.9% print, up slightly from 0.8% in December. A disappointing number will likely cause the euro to extend lower, as fears will grow that the ECB could cut interest rates in order to stave off deflation.
In other currencies, the pound consolidated losses in Asia, ending down 0.07% against the dollar to 1.6472. The UK GfK Consumer Confidence Report released early today came in better-than-expected but did little to lift the British currency.
The aussie was knocked lower after some disappointing Australian PPI numbers (Producer Price Index), bringing the currency down 0.22% against the US dollar to 0.8771.
Looking past the Eurozone data releases, the key US data to focus on will be on US personal spending and the final University of Michigan consumer sentiment index.
The yen was in focus today as it gained strength following some positive news out of Japan. The country’s core inflation rate accelerated more-than-expected to a 5-year high in December. This was good news for a country grappling deflation, which the Bank of Japan has fought in the past year with aggressive monetary policy.
Japan’s core CPI (which excludes fresh food but includes energy costs), rose 1.3% in December compared to a year ago.
The dollar was pushed lower by the stronger yen, losing 0.22% to 102.47. Trading was slow in Asia as a number of countries were observing to the Lunar New Year holiday.
The greenback was otherwise stronger elsewhere, as Thursday’s US GDP print helped boost it higher. The US economy grew at a 3.2% rate in the last three months to December, with exports and household spending playing a large role in contributing to the increase.
The euro remained weak in Asia, after a big drop against the dollar yesterday on disappointing German inflation data. The weaker CPI from Europe’s largest economy raises concern over how the overall Eurozone CPI numbers will come out later today. Any signs of deflationary pressures could push the European Central Bank to take action.
The euro lost 0.13% during the Asian session to end at a 1-week low of 1.3538, moving off Thursday’s high of 1.3664.
The Eurozone CPI data due at 1000 GMT will be a key risk event for the euro. Forecasts are for a 0.9% print, up slightly from 0.8% in December. A disappointing number will likely cause the euro to extend lower, as fears will grow that the ECB could cut interest rates in order to stave off deflation.
In other currencies, the pound consolidated losses in Asia, ending down 0.07% against the dollar to 1.6472. The UK GfK Consumer Confidence Report released early today came in better-than-expected but did little to lift the British currency.
The aussie was knocked lower after some disappointing Australian PPI numbers (Producer Price Index), bringing the currency down 0.22% against the US dollar to 0.8771.
Looking past the Eurozone data releases, the key US data to focus on will be on US personal spending and the final University of Michigan consumer sentiment index.
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