USD/JPY is back under 158. We had wages data from Japan today boosting the yen, with base salaries seeing their largest increase in 32 years. This keeps the prospects of Bank of Japan rate hikes alive in the near term. The bank next meet on January 23 and 24 and a hike is not a lock by any means, but the data today supporting the view of a cycle of solid wage growth and inflation has increased the chance. I should note, wages declined in inflation-adjusted terms.
The main data of focus for the session was inflation, CPI and PPI, from China for December. December CPI fell to its slowest since April. Core inflation rose to its highest in 5 months, so perhaps we’ll see some headline rises at a fast pace to come. The PPI remains in deflation for the 27th month in a row. Chinese equities are not a lot changed as I post, with the Shanghai Composite down around 0.25% and Hong Kong’s Hang Seng up a similar amount.
Also on the data agenda today were Australian retail sales. These rose by 0.8% (expected +1%) in November - the most in 10 months - from October, when they increased by a revised 0.5%. AUD/USD dipped a few tics on the data but there has been no follow through.
No sooner do I post "USD/JPY is back under 158" than it pops up and makes a liar out of me by .004 ;-)
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In non-market news the wildfires in California are continuing. A mandatory evacuation has been order for Hollywood according to the latest I've seen. US President Joe Biden has approved California’s Major Disaster Declaration, and ordered Federal Assistance to aid in the State’s Wildfire Response.
This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
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