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Forex - Japanese yen weaker ahead of Bank of Japan July minutes

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Investing.com -

Investing.com - The Japanese yen held slightly weaker on Wednesday ahead of Bank of Japan minutes and a busy data day in the region.

USD/JPY traded at 102.30, up 0.03%, while AUD/USD was flat at 0.9268.

Japan releases second quarter preliminary GDP data and the BoJ's minutes of its July policy board meeting at 0850 Tokyo time (2350 GMT).

Japan's economy is forecast to have shrunk 1.8% on quarter, or an annualized 7.1%, posting the first contraction in seven quarters mainly linked to consumption after the April sales tax hike and marking the largest drop since January-March 2009.

In Australia, the August Westpac-MI Consumer Sentiment is due at 1030 Sydney time (0030 GMT) followed by the second quarter wage price index an hour later (0130 GMT).

Consumer sentiment is currently below 100.0 at 94.9 and a big risk to the latest survey could be news of rise in unemployment rate.

The wage price index is expected to post a 0.7% gain for the third straight quarter.

Also due are industrial output, retail sales and fixed asset investment data out of China at 1330 local time (0530 GMT). The forecast for industrial production is a gain of 9.0% year-on-year, while retail sales are seen up 12.4% year-on-year and 17.4% for fixed asset investment.

Overnight, soft German sentiment data weakened the euro and bolstered the dollar, though concerns the Ukraine conflict could flare up anew softened the greenback against other major currencies throughout the trading session.

The ZEW Centre for Economic Research reported that its index of German economic sentiment dropped to 8.6 this month, down from 27.1 in July. It was the weakest reading in 20 months and came in well below economists' forecasts of 18.2.

The current conditions index deteriorated to a seven-month low of 44.3 from 61.8 in July, worse than expectations for a decline to 55.5.

Geopolitical tensions in Eastern Europe are apparently taking their toll on the German economy.

Recent economic reports have indicated that sanctions slapped on Russia due to its alleged meddling in the Ukraine conflict are dragging on the German economy.

Germany is Russia's largest trading partner in Europe.

The report also indicated that economic growth in Germany will be weaker than expected in 2014.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 81.57.

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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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