USD/JPY
traded higher today, towards 154.00. There was a slew of data
releases from the country, and, on balance, the indicators were
encouraging:
- PMIs
improved (manufacturing did remain in contraction for the 6th
month in a row though) - Machine
orders improved (a volatile data set though) - The
Tertiary Industry Activity Index (a service sector indicator)
improved strongly
If
you need a reminder, the Bank of Japan meets this week, on the 18th
and 19th.
The consensus is the bank will leave its interest rates on hold.
Indeed, this seems to be a factor weighing on the yen right now. I do
have to wonder at the the generally improving trend in Japanese data,
though. The BoJ may well be wondering the same thing?
Apart
from USD/JPY the USD weakened a little across the major FX board.
We
received China property market data first, which showed China’s
home price declines continued,
but that prices fell the least in around one-and-a-half years. New
home prices in 70 major cities fell -0.2% m/m, the smallest decrease
in 17 months. Following
this were the broader Chinese economic data, for November:
- industrial
output growth quickened slightly in November - retail
sales, a gauge of consumption, disappointed, growing just 3.3% last
month, much slower than a 4.8% rise seen in October and well under
the predicted 4.6% expansion.
As
I noted in the data post, the industrial production improvement was
attributed to stimulus measures, but given borderline CPI deflation
and lacklustre domestic demand, any stimulus aimed at increased
production seems less than ideal (more production into weak demand
will tend to weaken price growth further and tip China closer to consumer price deflation again). The weaker retail figures
came despite a boost from major online shopping promotions and
government-subsidised trade-in programs that improved sales in some sectors.
China’s National Bureau of
Statistics (NBS) spokesperson asserted that the trend of recovery in
consumption has not changed and that officials would implement more
policies to boost domestic demand.
Chinese
equities fell on the session.
In politics, South Korea’s
President Yoon Suk Yeol was impeached.
***
Crypto was a star for the
session, with Bitcoin surging to record highs above US $106,000.