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Forex - Japanese yen, Aussie steady ahead of CPI data from Tokyo

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Investing.com -

Investing.com - The Japanese yen and Australian dollar are flat in early Asian trade Friday ahead of consumer price data from Tokyo.

Japan's national CPI data for June is due at 0830 Tokyo time (2330 GMT). The median forecast (excluding perishables but including energy) for core data is a 3.3% increase on year, a 13th straight year-on-year rise, but a slower pace than the 3.4% increase in May.

At 0850 (2350 GMT), Japan's June service producer price index and the MOF's weekly international transactions in securities are due.

USD/JPY traded at 101.80, down 0.01%, while AUD/USD traded at 0.9417, also down 0.01%.

The Japan inflation data is a key focus in the central bank's efforts to reach 2% sustained inflation by 2015 via aggressive monteary easing accompanied by government economic reforms.

Overnight, the dollar traded higher against most major currencies, buoyed by data that revealed first-time jobless assistance claims fell to eight-year lows, though upbeat factory gauges in Europe sent the euro taking back earlier losses against the greenback.

The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending July 19 declined by 19,000 to 284,000, down from the previous week's total of 303,000.

Analysts had expected jobless claims to rise by 5,000 to 308,000 last week, and the positive numbers fueled speculation that the Federal Reserve may hike interest rates sooner than markets once anticipated.

While the Fed is seen closing its monthly bond-buying stimulus program likely in October, uncertainty as to how much time will pass from that point until rate hikes begin makes the dollar move on both positive and negative indicators.

A separate report showed that U.S. new home sales dropped by 8.1% to 406,000 units last month, worse than expectations for a decline of 5.3%, pointing to underlying weakness in the housing sector, which capped the dollar's advance along with cheery European factory data.

A preliminary reading of the euro zone manufacturing purchasing managers' index rose to a two-month high of 51.9 for July, beating market calls for a 51.7 reading. The bloc's services PMI jumped to a 38-month high of 54.4, beating expectations for a 52.7 reading.

Private sector activity in Germany also expanded in July, with the country's services PMI jumping to a 37-month high. The French service sector also expanded this month, but the contraction in the country's manufacturing sector deepened.

Ongoing concerns that conflicts in Ukraine and Gaza will dampen global economic recovery weighed on both currencies.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 80.95.

On Friday, the U.S. is to round up the week with data on durable goods orders.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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