Small JPY Firming Following Mixed Japanese Employment & CPI Data

Japan’s jobless rate rose to 5.0% in March, surprising expectations for it to remain at 4.9%.

Tokyo CPI for April was released simultaneously. Core Tokyo consumer prices (excluding both food and energy) declined by an annual 1.4%, above expectations for a 1.6% drop to follow the 1.2% decline in March. Meanwhile, core CPI (excluding fresh food) slipped by 1.9% year-over-year in April versus calls for a 2.1% decline after the 1.8% fall previously. Headline Tokyo consumer prices, on the other hand, declined by 1.5% on the year, surprising the consensus forecast for a 2.1% fall to follow the revised 1.8% drop in March.

However, national Japanese CPI for March was in line with the consensus forecast. Core national consumer prices (excluding both food and energy) weakened by 1.1% on the year, as expected, and mirroring their drop in February. Core prices (excluding fresh food) slipped by an annual 1.2%, as forecast, and following its identical drop in February. Finally, headline national CPI slipped by 1.1% on the year in March, as expected, and again mirroring its drop the month before.

While the rise in Japan’s jobless rate is yen-negative, the smaller-than-expected fall in Tokyo CPI is supportive for the currency. However, the two releases seemed to cancel each other out, with the yen strengthening only slightly – USD/JPY slipped by just 0.11 yen to 93.94, a new intraday low.

NZD/USD See-Saws Dramatically as RBNZ Holds Rates & Signals Rate Hikes in the “Coming Months”

As unanimously expected by economists, the Reserve Bank of New Zealand held its cash rate at 2.50%. The central bank said that although domestic households “remain cautious” and business spending continues to be “weak”, the central bank continues “to expect the New Zealand economy to recover in line with or slightly faster than our March statement projections”. The RBNZ added that they “expect to begin removing policy stimulus over the coming months”, contingent on the recovery progressing as expected. Following the announcement, NZD/USD spiked by around 0.25 U.S. cents to $0.7233USD, an early session high, before falling to $0.7176USD. The short-lived rally can be explained by the central banks’ comment that rate hikes are scheduled for the “coming months” and the statement that the recovery is recovering “in line or slightly faster” than predicted in March. However, the ensuing weakness in the currency was probably in reaction to the more negative aspects of the statement.

AUD/USD Rallies as Australian Consumer Prices Exceed Expectations in Q1

Consumer prices in Australia increased at a slightly faster pace than expected in Q1. They rose 0.9% on the quarter, above call for a 0.8% increase to follow the 0.5% gain in the final quarter of 2009. Meanwhile, annually, consumer prices rose by 2.9% versus expectations for a 2.8% increase after their 2.1% rise in Q4. Following the above-consensus data, which suggest that another rate hike from the Reserve Bank of Australia is now more likely, AUD/USD firmed by almost 0.2 U.S. cents to hit $0.9192USD, a new intraday high.

Small AUD/USD Spike as Australian PPI Rises Faster than Expected in Q1

Australian producer prices rose at a faster-than-expected quarterly pace in Q1. PPI increased 1.0% on the quarter versus the consensus forecast for a 0.6% gain to follow the 0.4% decrease in Q4 of last year. Meanwhile, producer prices declined 0.1% on the year in Q1, above calls for a 0.6% drop after the 1.5% fall in the final quarter of 2009. Following the upside surprise in the data, AUD/USD firmed by almost 0.2 U.S. cents to touch $0.9286USD, just one pip south of the pair’s intraday high, before declining. The PPI report suggests that Australian consumer prices, released next week, may have risen by more than economists had expected. If so, the RBA will come under pressure to continue to increase interest rates to counter inflation.

JPY Weakens Slightly vs. USD as Japanese Corporate Service Price Index Falls by Less than Expected in March

Japan’s corporate service price index declined by slightly less than expected in March. The indicator fell by an annual 1.1% compared to the consensus call for a 1.4% drop to follow the revised 1.2% decline in February. Following the release, the yen weakened slightly versus the greenback. USD/JPY climbed by 0.18 yen to reach 94.18 before declining. However, the pair remained below its intraday high of 94.19 before declining.

NZD/USD Plummets as Kiwi Retail Sales Post Surprise Decline in Feb.

New Zealand retail sales unexpectedly weakened in February. Sales slipped back by 0.6% on the month in February, a move that was worse than the consensus forecast for a 0.2% rise to follow the revised 0.7% gain in January. Meanwhile, core sales (excluding autos) slipped by 0.9% in February, disappointing calls for a 0.4% rise to exceed the 0.3% gain previously. Following the downbeat data, NZD/USD sold off by 53 pips to hit $0.7086USD in a move that more than wiped out the minor 15 pip gain the pair managed on Tuesday. NZD/USD is now at its worst level since last Friday, when the pair touched $0.7162USD before it was strengthened by rumours of the Greek loans injecting risk appetite into markets. Support lies down at $0.7008USD from April 8.

Minor AUD/USD Rise as Aussie NAB Business Conditions Index Improves but Confidence Weakens

The Australian NAB business conditions index rose to a 13 level in March from an 8 print the month before. However, the business confidence component slipped back to a 16 read from 19 in February. The Australian dollar’s reaction to the mixed data has been understandably restrained as the currency has been torn between one component’s improvement and the other’s deterioration. AUD/USD has therefore only firmed by a tentative dozen pips to reach $0.9258USD versus a session high of $0.9276USD.

Yen Weakens vs. USD as BOJ March 16-17 Meeting Minutes Say that Suda & Noda Opposed Increasing Credit Program

The minutes from the Bank of Japan’s March 16-17 meeting revealed that Policy Board member Miyako Suda said there was no concrete rationale for increasing the central bank’s credit program to ¥20 trillion ($214 billion). Suda was joined in her opposition to doubling the scheme by Tadao Noda, who said the move would only have a limited impact. However, the minutes also revealed that many Policy Board members thought more lending would bolster the domestic economy. Following the release, the yen weakened against the greenback. USD/JPY rose by 0.17 yen to reach 93.23, a level just 7 pips below the pair’s session high.

USD/JPY Weakens as Japanese Finance Minister Says Economy “Gradually” Improving, though Self-Sustained Recovery Doubtful

Speaking at a press conference in Tokyo, Japan Finance Minister Naoto Kan noted that the yen is depreciating significantly. His comments come after Japan’s currency on Thursday hit its lowest level versus the greenback in more than seven months. With regards to the Chinese yuan’s exchange rate, Kan said it isn’t desirable to pressure Beijing on making the currency more flexible. He also said that the Japanese economy is “gradually” improving, though there’s only a “weak” possibility at present of a self-sustained rebound for the island nation. Following the finance minister’s comments, the yen strengthened, with USD/JPY falling to 93.68, a new intraday low, before pulling up from the brink. Traders undoubtedly picked up on Kan’s positive, albeit guarded, comments on the Japanese recovery.

Yen Rallies vs. USD as Japanese Tankan Survey Reveals Broad-Based Improvement in Q1

The Japanese Tankan survey for the first quarter of this year improved from its previous levels, especially in the non-manufacturing sector. The large manufacturers index rose to a -14 level, as expected, from -24 in Q4 of 2009. Meanwhile, the large manufacturing outlook increased to -8 in Q1 from -18 previously in a move that was also in line with the consensus forecast. The non-manufacturing index rose to a -14 read, beating calls for an improvement to -18 from -22 in Q4. Similarly, the non-manufacturing outlook component rose to -10 in Q1, overarching calls for an increase to -15 from -19 previously. Following the upbeat data, the yen strengthened: USD/JPY sold off by over 0.2 yen to hit a new intraday low of 93.41.

AUD/USD Sells Off Following Downbeat Aussie Retail Sales & Building Approvals for Feb

Australian retail sales disappointed the consensus forecast in February. Sales fell by 1.4% on the month versus expectations for a 0.3% rise to bolster the revised 1.1% gain in January. Released simultaneously, Australian private sector credit for February was essentially in-line with economists’ forecasts. Credit rose 0.4% on the month, as expected, and mirroring its gain in January. In annualized terms, credit increased by 1.6% in February versus calls for a 1.5% rise and following the 1.3% gain the month before. Although lower-tier in nature, Aussie building approvals data compounded the disappointing retail sales figures: approvals slipped by 3.3% on the month in February in a move that underarched calls for a 2.1% gain to partially erase the revised 5.5% drop the month before. Following the downbeat retail sales and housing figures, the Australian dollar sold off by almost 0.6 U.S. cents to hit a new session low of $0.9146USD.

Negligible JPY Reaction to Downbeat BSI Survey of Japanese Manufacturers

Japan’s large manufacturers remained optimistic in Q1 though sentiment declined from the previous quarter, according to government data released on Thursday. The BSI survey of large manufacturers fell to a 4.3 level in the first three months of 2010 from 13.2 in the previous quarter. A reading above zero indicates that optimists outweigh pessimists. However, the all industry poll indicated increasing pessimism with the index falling to a -2.4 level from -1.9 in Q4 of 2009. Despite the downbeat data, the yen’s reaction was minimal – USD/JPY rose by only a handful of pips to 90.45.

No USD/JPY Reaction to Above-Consensus Rise in Japanese Tertiary Sector Index

Japan’s service sector continued to expand in January, according to the island nation’s tertiary industry index on Wednesday. The indicator rose by 2.9% on the month, surprising expectations for only a 1.3% gain to follow the index’s 0.9% fall in December. Despite the upbeat results, the release remains only a medium-tier data-point and so was essentially shrugged off by the yen. The extent of USD/JPY’s reaction was to slip by a handful of pips to 90.29 yen. In early Asia-Pacific trading on Wednesday, the pair has traded between a high of 90.45 and al low of 90.22. Short term resistance lies at 92.15 with support at 89.63 and 88.14.

AUD/USD Slips as RBA Minutes Reveal Rates to “Move Gradually” Towards Normal Levels

Released on Tuesday (Monday night EDT), the Reserve Bank of Australia’s minutes from their meeting of March 2 revealed that Board members considered it “appropriate for interest rates to move gradually towards normal levels, and that it was time to make take another step in that direction”. The minutes also said, "Some recent indicators suggested that growth might already have been running at or close to trend for a few months." The central bank also said that inflation is likely to fall to around 2.5% in the year ahead. The RBA also said that growth will be "around trend rates over the next couple of years" and global economic activity will “continue at a reasonable pace with significant regional differences". With traders no doubt focusing on the fact that rates will move “gradually”, AUD/USD weakened to $0.9125USD following the announcement.

AUD Takes Back Losses From Weak Employment Report

The Australian dollar is taking back losses incurred after a weaker than expected employment report for February.

According to the Australian Bureau of Statistics on Thursday, the economy created 0.4k jobs in February, short of the prior month’s revised 56.5k gain and expectations for a more modest 15.0k increase.

Prior to revisions, January job creation was up 52.7K.

Meanwhile, the unemployment rate rose to 5.3% from the revised 5.2% the month prior, in line with forecasts.

Prior to revisions, the unemployment rate was 5.3%.

Details of the report were good, however with 11.4k full time jobs created, adding to the prior month’s 12.0k gain. Part time employment, meanwhile, declined by 11.0K compared to the prior 44.5k pickup.

The news put pressure on the Australian dollar, with the currency losing 15 pips to the USD at 0.9121.

Nevertheless, the pair last traded flat against the USD, at 0.9140, after trading in a range between 0.9121 and 0.9157 so far today.

Short term resistance lies at 0.9243, and 0.9328, with support at 0.8979, 0.888 and then 0.8801.

Aussie Hanging On to Gains After Upbeat Comments From RBA’s Lowe

The Australian dollar is trying to hang on to some gains following some upbeat commentary from Reserve Bank of Australia Assistant Governor Philip Lowe on Wednesday.

Speaking at an event in Sydney today, the central banker said that the RBA needs to continue stimulating the supply side of the economy so as to allow domestic demand to progress without causing inflation, and that he expects the Australian economy to expand at above-average pace over the next few years, a development which would likely spur inflation and house prices.

He added that efforts by Chinese officials to tighten monetary policy are a positive development for the global economy, and that the strength of the economic rebound in Asia is surprising.

The comments suggest that more monetary policy tightening could be in the cards, as the central bank would seek to combat higher prices by raising interest rates. Indeed the central bank has hiked multiple times in recent months, with additional tightening already signaled to the markets.

On the data side, Westpac reported that its benchmark Australian consumer confidence index for the month of March advanced by 0.3 points to 117.3, a 0.2% month-over-month increase. In February, the index deteriorated by 2.6%.

The good news was later turned aside, however after home loans fell 7.9% month-over-month in January despite calls for a 2.0% increase.

December’s home loans, meanwhile, declined by 5.1%. Investment lending rose 0.9% compared to the prior 1.6% gain and the value of loans contracted by 5.0% month-over-month, adding to the prior 4.2% contraction.

In the aftermath of the announcements the Australian dollar finds itself higher by 10 pips at 0.9150 after trading in a range between 0.9163 to 0.9133. Short term resistance lies at 0.9243, and 0.9328, with support at 0.8979, 0.888 and then 0.8801.

PBOC Officials Hint At Looser Currency Controls Down the Road

Chinese officials appear inclined to move towards looser controls on the Chinese yuan but the time is not yet right, according to officials at the People’s Bank of China over the weekend.

Speaking at the National People’s Congress, central bank Governor Zhou Xiaochuan, said China must be very careful in how its abandons its crisis-fighting policies, including its management of the exchange rate between the yuan and the U.S. dollar.

The global economic recovery is not yet solid, he added.

Adding to the comments, PBOC deputy Su Ning, said that a gradual appreciation of the yuan will be beneficial to China, in that it would spur domestic demand, and improve standards of living for the nation.

The both policymakers’ comments suggest that China is indeed planning to loosen controls on the currency down the road, although the timing appears academic at best.

Indeed, while a stronger domestic economy would likely help China, it likely remains too soon for the nation to risk jeopardizing its thriving export economy with a stronger currency.

Meanwhile on the monetary policy front, the People’s Bank of China will said it would maintain a “moderately loose” monetary policy and sufficient liquidity to its financial system, reiterating comments made over the last several weeks over which the PBOC has tightened policy slightly.

Likely an appreciation in the yuan will have an upward effect on the U.S. dollar against which it is tied, but that time remains a ways off.

Aussie Dollar Rallies as Australian Retail Sales are Better the Consensus in Jan.

Australian retail sales rose at a faster-than-expected pace in January. Seasonally-adjusted, they increased by 1.2% on the month in a move that exceeded the consensus forecast for a 0.5% gain to follow the revised 0.9% fall in December. The upbeat data provoked a rally in the Aussie dollar, which immediately strengthened by 29 pips to reach $0.9014, though it failed to breach its session high two pips above that before it rapidly fell back. Nonetheless, in less than a minute, AUD/USD rose again and recently traded at $0.9003. If the pair does manage to breach its intraday high of $0.9016USD, it’s targeting resistance of $0.9071USD from Feb. 23 and then $0.9328USD from Jan. 14.

AUD/USD Rises to New Intraday High as RBA’s Stevens Says Aussie Financials have Weathered the Financial Storm Well

Speaking on a panel discussion in Melbourne on Monday (Sunday evening EST), Reserve Bank of Australia Governor Glenn Stevens said that although the nation’s banks have weathered the global crisis well, it would be “foolish” to argue that everything is Australia is “peachy”. He added that it “wouldn’t hurt” Aussie financials to have more capital. While making no dramatic moves, AUD/USD has steadily strengthened during Stevens’ speech, rising by 17 pips to carve out a new session high of $0.8991USD. The pair’s targeting resistance of $0.9071USD, touched on Feb. 23.

Yen Pops After Slower CPI Declines

The yen is making extraordinary gains on Thursday after some slower than expected inflation reclines released earlier in the day.

Headline Tokyo CPI declined 1.8% year-over-year, slower than calls for a 2.0% pullback and prior 2.1% decline. Excluding fresh food, CPI also fell 1.8%, also slower than calls for no change to the prior month’s 2.0% pullback. CPI excluding fresh food and energy declined by 1.3%, also slower than expectations for a 1.5% pullback and prior month’s 1.4% decline.

Meanwhile national headline CPU fell by 1.3% year-over-year in January, slower than calls for a 1.4% decline and prior 1.7% contraction. Excluding fresh food, CPI declined by 1.3%, in line with forecasts and prior, while CPI excluding fresh food and energy fell 1.2%, also in line with priors and forecasts.

In the immediate aftermath, USD/JPY popped 12 pips to 89.28.

The Japanese yen ignored a very strong bout of economic data out of Japan released just moments later.

Preliminary industrial production advanced 2.5% month-over-month in January, above forecasts for a 1.0% pickup and prior 1.9% gain. Annual production rose 18.2%, also above expectations for a 16.5% gain and prior 5.1% increase.

Meanwhile headline retail sales rose 1.9% month-over-month, above forecast for a 0.3% pickup and reversing a 1.1% contraction in December. Annual sales rose by 2.6%, ousting calls for a 0.2% decline and prior 0.2% fall.

USD/JPY last traded lower by 81 pips at 89.34 after trading in a range of 89.47 to 90.32 today.

Short term resistance lies at 92.15, 92.42 and 92.66, with support at 89.16, 89.15, and 88.56.

Yen Strengthens Very Slightly to New Session High Following Marginally Better than Expected Japanese Q4 GDP Data

Japan’s economy expanded at a slightly faster rate than economists expected in Q4, according to preliminary data released by the country’s government on Monday. The island nation’s GDP rose by 1.1% compared to the consensus call for a 0.9% gain. The expansion followed the flat rate in the previous quarter, which had been originally reported as a 0.3% rise. Meanwhile, annualized, Japanese preliminary Q4 GDP increased 4.6% versus expectations for a 3.5% growth rate and following the flat reading the prior quarter. Following the marginally better-than-expected data, USD/JPY weakened by a slight 0.05 yen to reach 89.98, which, despite the restraint of the move, was a new intraday low for the pair. However, USD/JPY quickly recovered and indeed went on to trade at a higher level than prior to the release. The pair recently traded at 90.08, a rate close to USD/JPY’s session high of 90.13.

Negligible AUD/USD Rise as RBA’s Lowe Says Aussie Economy is Outperforming Other Developed Nations

Australia’s economy is currently better placed than those of its industrialised peers, Reserve Bank of Australia Assistant Governor Lowe said on Thursday. “Unlike many other advanced economies, employment has recently grown strongly and the level of investment remains high,” Lowe told an audience in Sydney. He said that “the central scenario for Australia over the next few years remains a positive one”. Addressing the global economy, Lowe added that risks remain in industrialised nations and in Asia. Focusing on one of the latter region’s major players, he said that there’s a danger of China’s economy overheating if Beijing doesn’t reduce its stimulus. On the domestic front, Lowe said that inflation will remain in target over the next two years. Although the central banker refused to give any hints on the RBA’s monetary policy tightening cycle, he said the bank’s cash rate “has been far from normal”. The AUD/USD firmed by an essentially negligible 7 pips to $0.8979USD following Lowe’s speech. The Aussie dollar’s restrained move can be explained by the fact that the central banker didn’t tell markets anything they didn’t already know.

Yen Weakens vs. the USD as Japanese Tertiary Sector Index Disappoints the Consensus in Dec.

Japan’s tertiary industry index declined more than expected in December, according to data released on Wednesday. The index fell by 0.9% month-over-month, disappointing economists’ expectations for only a 0.2% drop to follow November’s revised 0.1% fall. In the aftermath of the downbeat Japanese data, USD/JPY rose by 0.09 yen to a new session high – just – of 90.29 before stabilizing.

Japanese Deflation Wasn't As Bad As Expected

Japanese machine orders surged in December, rising 20.1% compared to the +8.0% expected and the -11.3% prior. The strong data narrows the year-over-year drop to 1.5% compared to -20.5% in November and -10.8% expected. At the same time, deflation wasn't as bad as expected, according to the corporate goods price index, which showed a 2.1% yearly decline, compared to the -2.3% expected and -3.9% prior.

AUD/USD Falls to Fresh Six-Week Low Following Downbeat Retail Sales Data

Australian retail sales disappointed economists’ expectations in December by falling, according to data released on Thursday (Wednesday evening EST) by the country’s statistics bureau. Seasonally-adjusted, sales fell 0.7% month-over-month, underwhelming the consensus call for a 0.2% rise to bolster the revised 1.5% gain in November. Released simultaneously, Aussie building approvals also defied the consensus in December – however, their surprise was in the opposite direction. Approvals rose 2.2% on the month versus expectations for a flat reading. Nonetheless, the gain in approvals in December was a fraction of their upwardly-revised 10.4% rise the month before. Meanwhile, annualized, approvals increased 53.3% in December, overarching their expected 38.2% gain and previous 33.3% rise. Following the mixed data, AUD/USD sold off by 44 pips to hit $0.8778USD, its lowest level since Dec. 23, when it touched $0.8735USD. The latter level is AUD/USD’s next support to breach. It appears the Aussie dollar reacted to the disappointing retail data, with traders inferring that the Reserve Bank of Australia is now more likely to hold rates at 3.75% at its next meeting due to concerns about the recovery.

AUD/USD Hits New Session High Following Aussie Trade Data

Australia’s trade deficit expanded by less than expected in December, according to data released by the country’s statistics bureau on Wednesday (Tuesday night EST). The trade shortfall increased to A$2252 million versus the consensus call for a rise to A$2400 million from the revised A$1728 million deficit in November. Following the data, AUD/USD rose by 11 pips to $0.8881USD, a new intraday high.

AUD/USD Sells Off as RBA Holds Rates at 3.75% Unexpectedly

Australias central bank announced on Tuesday (Monday night EST) that it has decided to hold its cash target at 3.75%. RBA Governor Glenn Stevens said that information about the early impact of the central banks previous rate hikes is still limited and so the RBA considered it appropriate to uphold the monetary policy status quo. The move surprised the consensus forecast, which had unanimously expected a 25bps hike to 4.0%. In the aftermath of the unexpected decision, the Australian dollar plummeted against the greenback: AUD/USD shed 117 pips to reach $0.8806USD, a new session low. Five-day support for the pair rests not far from AUD/USDs current level at $0.8789, hit on Feb. 1.

Restrained AUD/USD reaction to Above-Consensus Rise in Aussie House Price Index in Q4

Australian house prices continued to increase in Q4, according to data released by the country’s Bureau of Statistics on Monday (Sunday night EST). The Aussie house price index rose 5.2% on the quarter in the last three months of 2009, which was a faster pace than both the 3.5% gain economists had expected and the revised 4.4% increase in Q3. Annualized, prices rose 13.6%, overarching the consensus call for an 11.0% gain and more-than doubling the revised 6.6% rise previously. Despite the upbeat data, the Australian dollar’s reaction was restrained: AUD/USD initially slipped by 4 pips to $0.8857USD, before firming by 8 pips to $0.8865USD. The pair remains close to its session high of $0.8872USD, hit about half-an-hour before the Aussie home prices data’s release.

USD/JPY Rises On Risk Aversion, Ignoring Economic Data

Risk aversion from the North American and European sessions is driving the Japanese currency higher on Friday, ignoring some upbeat economic data.

During the North American session, the S&P 500 fell as low as 1,078, its weakest level since early November 2009, and putting the index below its 100-day moving average for the first time since last April. Ultimately the index finished the day at 1,085, though, 1.2% lower on the day.

The only respite came after an upbeat unemployment from Japan. According to local authorities, the country’s unemployment rate fell to 5.1% in December, contrary to calls for an increase to 5.3% from 5.2% the month prior.

Meanwhile the job-to-applicant ratio advanced to 0.46 from 0.45, as expected.

USD/JPY surged 12 pips to 89.80 off an intraday low of 89.689 reached just moments before the announcement.

Released simultaneously, but ignored by the markets, headline national CPI declined by 1.7% year-over-year in December, in line with expectations, but slower than November’s 1.9% pullback. Meanwhile consumer prices excluding fresh food fell by 1.3%, also in line and slower than the prior month’s 1.7% pullback. Excluding fresh food and energy, prices were down 1.3%, just a tad faster than calls for a 1.1% contraction and the previous 1.0% fall.

Also released were the Tokyo CPI statistics for January. Headline inflation was down 2.1% on the year, in line with forecasts and slower than the prior 2.2% shortfall. Excluding fresh food, CPI fell by 2.0%, faster than projections for a 1.8% contraction and prior 1.9% fall. CPI excluding fresh food and energy was down 1.4%, in line with forecasts and slower than the previous month’s 1.5% slide.

The bottom line is that with deflation firmly entrenched in Japan and interest rates very low, it is very hard to trade any of the inflation data until they return to normal.

Just minutes later, preliminary Japanese industrial production grew 2.2% month-over-month, short of forecasts for a 2.5% increase in January and slower than the revised 2.2% gain. Before to revisions, November’s increase was of 2.2%.

In annual terms, production rose 5.3%, short of expectations for a 5.7% pickup, but rebounding from November’s 4.2% contraction, and therefore ending a 14-month losing streak.

Again, the Japanese currency continued to press against the greenback.

So far today, the pair has traded in a range of 89.59 to 90.05. Short term support lies at 88.97 followed by 88.58. Resistance lies at 90.55 followed by 91.88.

Yen Broadly Ignores Weak Retail Data

The Japanese currency moved negligibly higher after retail sales unexpectedly declined further than expectations in December.

Sales were down 1.2% month-over-month despite calls for a 0.2% contraction and after a 0.2% shortfall in November. Annual sales, meanwhile, fell by 0.3% contrary to calls for a 0.3% increase. In November, sales were down 1.0%.

On the flip side large retailers did better than projected with annual sales down 4.6% year-over-year, slower than calls for a 7.3% pullback and prior 9.6% contraction.

The yen failed to show any meaningful reaction to the data after heading lower in the aftermath of what was a relatively hawkish interest rate decision from the FOMC earlier in the day.

In the immediate aftermath of the retail data, USD/JPY fell by a mere five pips to 89.95 after trading in a range of 89.97 to 90.05 throughout the day. There is support at 89.14 with resistance at 90.09.

AUD

AUD Surges After CPI Comes In Just a Bit Faster Than Forecast

Australian dollar is surging against the USD, in the aftermath of a slightly stronger than expected CPI report.

According to the Australian Bureau of statistics, headline CPI was up 0.5% quarter-over-quarter, just faster than expectations for a 0.4% increase and slower than Q3’s 1.0% pickup.

Meanwhile, annual CPI advanced by 2.1%, just above calls for a 2.0% increase and prior 1.3% gain.

Details of the report were relatively in line, with the RBA’s trimmed mean CPI up 0.6% on the quarter, slower than Q3’s 0.8% pickup, and the weighted median up 0.7%, slower than the prior 0.8% rise.

The results in theory add credence to the view that the Reserve Bank of Australia will hike interest rates at next week’s interest rate decision, a development which most economists expect.

Nevertheless, after a weaker than expected PPI report released on Monday, market participants had only priced in a 67% chance of the hike occurring.

As a consequence, in the minutes following the announcement AUD/USD surged 26 pips to an intraday high of 0.9031. Support lies at 89.30 with resistance at 91.88 and 92.05.

Aussie PPI Falls in Q4

Aussie's better step it up....

The Australian dollar experience a brief sell off after the country’s producer price index turned out weaker than expected in Q4.

On quarterly basis, PPI declined by 0.4%, despite expectations for another 0.1% increase.

Meanwhile annual PPI contracted by 1.5%, further than forecasts for a 0.9% pullback and reversing a 0.2% increase in Q3.

The results suggest a downside bias in the Consumer Price Index to be released on Tuesday, a development which will weighed on the Australian Dollar.

The consensus is currently calling for a 0.4% quarterly gain to add to the prior 1.0% rise, and a 2.0% annual increase, faster than the previous 1.3% pickup.

In the immediate aftermath of the announcement, AUD/USD briefly declined 24 pips to 0.9023 before rebounding to pre-release levels.

The pair last traded higher by 61 pips at 0.9068 after trading in a range of 0.9015 to 0.9075 today. Short term support is at 0.8983 and 0.8939. Resistance is found at 0.9142 and 0.9155.

China Could Hike Interest Rates in April

Yikkessss!!!

With inflation higher than expected in yesterday's report, there is now talk that China could start raising interest rates as soon as April. Government officials are trying to cool the economy and have told several banks to stop lending. Weekly Chinese news magazine is reporting that BOCOM, Minsheng, China Merchants and Everbright are among the banks that have been told to halt loan originations. If China begins a swift interest rate hiking cycle, expect to see pressure on AUD, CAD and NZD.

AUD/USD Falls Abruptly Following Barrage of Chinese Data

Chinaaaaaa!!!

Chinese real GDP rose at a slightly faster pace in Q4 than economists were expecting, according to the Asian nation’s National Bureau of Statistics on Thursday (Wednesday evening EST). It rose 10.7% compared to the consensus call for a 10.5% rise to bolster the prior quarter’s revised 9.1% gain. Meanwhile, industrial production rose at an annualized 18.5% rate in December, below expectations for a 19.6% increase and the 19.2% rate in November. Retail sales, on the other hand, exceeded the consensus by rising 17.5% year-over-year in December compared to expectations for a 16.3% gain to bolster the previous month’s 15.8% rise. Chinese CPI rose an annualized 1.9% in December, a faster pace than the expected 1.4% rate and the previous 0.6% increase. Producer prices, on the other hand, increased 1.7% year-over-year in December, above calls for a 0.8% rise and following the 2.1% drop previously. Following the data, the AUD/USD instantly dropped 23 pips to $0.9101USD, before it rapidly returned to pre-release levels.

NZD/USD Sells Off as Kiwi Q4 CPI Falls Rather than Remains Flat on the Quarter

New Zealand!!!

Consumer prices in New Zealand declined 0.2% quarter-over-quarter in Q4, according to data issued by the country’s statistics bureau on Wednesday (Tuesday afternoon EST). The rise compared to economists’ expectations for a flat reading and followed the 1.3% gain in Q3. Meanwhile, consumer prices increased an annualized 2.0% in the final quarter of 2009, slightly below the consensus call for a 2.1% pace but above the previous 1.7% rise. Following the data, the Kiwi dollar declined by 31 pips to $0.7355USD.

Without Economic Data for Guidance, Yen Hits Four-Week High vs. USD

Ohhhh the yentels..lol

There are no Japanese indicators scheduled for release during the early part of Tuesday’s Asia-Pacific session. Indeed, the first release for the island nation won’t be launched upon markets until 11:00 p.m. EST on Monday night, when Japanese condominium sales for December will be released. In November, they increased an annualized 10.8%. Following that, at midnight EST, Japanese consumer confidence for December will be released. The month before, a 39.9 level was revealed. Despite the dearth of data for Japan, the yen recently strengthened to its best level against the greenback in four weeks. USD/JPY has slumped to 90.52, its worst rate versus Japan’s currency since Dec. 21, when it touched 90.16. Beyond that, support for the cross lies down at 88.97, hit on Dec. 18.

BOJ’s Shirakawa: Japanese Recovery to Continue but at Moderate Pace

Well at least there is some recovery.....

Japan’s economic recovery is expected to continue, though its pace is likely to remain moderate, Bank of Japan Governor Masaaki Shirakawa said on Monday (Sunday night EST). Speaking at the quarterly meeting of the central bank’s branch managers in Tokyo, he added that the Bank of Japan will maintain an extremely accommodative monetary policy. The decline in Japanese consumer prices will likely ease as the impact of crude oil prices slackens, according to Shirakawa. He also said that capital spending will stay flat in the short term. The yen’s reaction to the central banker’s comments was muted: USD/JPY rose 0.05 yen to 90.94, before returning to its level preceding Shirakawa’s speech.

USD/JPY Gains Quarter of a Yen Following Comments of Fed’s Plosser on Rate Hikes

Yea..Yea..Yea...yen, yen, yen!!!

Following Philadelphia Fed President Charles Plosser’s recent suggestion that the central bank should raise rates before unemployment falls to “acceptable” levels, the greenback strengthened moderately against the euro before slipping back. However, a more pronounced appreciation has been visible in USD/JPY: the greenback has slowly but steadily gained a net 0.25 yen to recently hit a new session high of 91.35. The move sees the U.S. dollar beginning to take back the losses it incurred versus Japan's currency on Jan. 12. Earlier in the day Mizuho currency experts had suggested that the Fed wouldn’t be raising rates in the near future, and this, they argued, made the yen more attractive to investors than the greenback. Obviously, Plosser’s comments imply an earlier-than-expected rate hike, although it should be emphasized that the central banker has no vote on the FOMC to implement his argument until 2011.

AUD/USD Soars to New One-Month High Following Aussie Trade & Retail Sales Data

Guess what i got more info on Aussy world...

Australia’s trade deficit shrank by more than economists expected in November, according to data released by the country’s statistics bureau on Thursday (Wednesday evening EST). The deficit fell to A$1700 million, a greater drop than the consensus call for it to fall to A$1800 from the revised A$2080 shortfall in October. Released simultaneously, Australia’s retail sales rose 1.4% on the month in November, overarching both expectations for a 0.3% increase and the revised 0.4% rise the month before. Following the data, the Aussie dollar rallied by 50 pips to a new session high against the greenback of $0.9267USD, before falling back slightly. The new intraday high is AUD/USD’s strongest level since Dec. 4, when it touched $0.9294USD. Resistance lies up at $0.9323USD, attained on Dec. 3.

CHINA

China's up to something....

The People's Bank of China has allowed 1-year bill rates to rise for the first time in 20 weeks. They sold them at a yield of 1.84%, up 8 basis points. Last week, the PBOC made a similar move with 3-month bills and it drew a great deal of attention because it's a sign that the government might be moving to cool down the economy by increasing borrowing rates. The rise is really a drop in the bucked but it's the second drop in two weeks and it will likely be seen as a sign of more to come. If China continues to raise rates it will cool the domestic economy and that will spill over to the rest of the world.

Fed's Bullard Says Markets Should Focus on Quantitative Easing

Ladies and Gents, Bullard is speaking his mind about the U.S. dollar....be prepared to hear what he has to say.....

St. Louis Fed President James Bullard (voter) had some comments today that have weighed on the U.S. dollar. Speaking in Shanghai, China, he said the market should focus on quantitative policy not interest rates. The market focus on interest rates is "disappointing", he said and added that that G7 rates may remain low for some time. In the future, he says monetary policy should put more weight on asset prices but that "better analysis" is needed on the asset price issue. He also said that the Fed's liquidityot" an inflationary concern. The comments are very dovish and are putting pressure on the USD and that should continue..

UD/USD Soars to New One-Month High Following Aussie Trade & Retail Sales Data

Hey everyone, I have found more great news about the Aussies...read on you Wallaby lovers...hehe

Australia’s trade deficit shrank by more than economists expected in November, according to data released by the country’s statistics bureau on Thursday (Wednesday evening EST). The deficit fell to A$1700 million, a greater drop than the consensus call for it to fall to A$1800 from the revised A$2080 shortfall in October. Released simultaneously, Australia’s retail sales rose 1.4% on the month in November, overarching both expectations for a 0.3% increase and the revised 0.4% rise the month before. Following the data, the Aussie dollar rallied by 50 pips to a new session high against the greenback of $0.9267USD, before falling back slightly. The new intraday high is AUD/USD’s strongest level since Dec. 4, when it touched $0.9294USD. Resistance lies up at $0.9323USD, attained on Dec. 3.

Moderate but Brief Rise in AUD/USD as Aussie Building Approvals Beat the Consensus in Nov.

Sine many of you liked the prior articles...I brought you new news about the Aussies and their Aussy dollars...hehe.

Building approvals in Australia rose more-than-expected in November, according to data released by the country’s bureau of statistics on Wednesday (Tuesday night EST). Approvals rose 5.9% month-over-month, overarching expectations for a 3.3% gain, and erasing their downwardly-revised 1.8% decline in October. Meanwhile, approvals rose 33.3% on the year, above calls for a 28.0% gain, and almost doubling the upwardly-revised 14.1% increase in October. Following the release, the Aussie dollar strengthened moderately, rising by as much as 12 pips to $0.9122USD, before quickly declining.