Market Commentary and Intraday News

Yen Weakens After Economic Data; BoJ In Focus

200 days ago

(RTTNews) - The yen edged lower across the board on Tuesday in Asia following the release of some major economic data from Japan. Traders are also waiting for the Bank of Japan interest rate decision, which is due to announce later in the session.

The unemployment rate in Japan was a seasonally adjusted 4.2 percent in September, the Ministry of Internal Affairs and Communications said on Tuesday. The figures were in line with expectations and unchanged from the previous month.

Industrial output in Japan declined a seasonally adjusted 4.1 percent on month in September, the Ministry of Economy, Trade and Industry said in Tuesday's preliminary reading. That misses expectations for a contraction of 3.1 percent following the 1.6 percent decline in August.

On a yearly basis, industrial production plummeted 8.1 percent - also missing forecasts for a fall of 7.1 percent after shedding 4.6 percent in the previous month.

Average household spending in Japan was down 0.9 percent on year in September, the Ministry of Internal Affairs and Communications said on Tuesday, standing at 266,705 yen. That was well shy of forecasts for an increase of 0.8 percent following the 1.8 percent gain in August.

The Bank of Japan is widely expected to keep interest rates on hold at the current level of 0 to 0.10 percent, although analysts are uncertain if the bank will provide some other means of stimulus.

The BoJ is widely expected to cut its forecast for GDP and inflation at the conclusion of its 2-day Monetary Policy Board meeting today. Speculation is also rife that the bank will consider another round of monetary easing at the meeting.

The yen dropped to 4-day lows of 79.94 against the US dollar, 103.28 against the euro, 85.48 against the Swiss franc and 65.63 against the New Zealand dollar following the data. The yen also reached session's lows of 128.20 against the pound, 79.91 against the Canadian dollar and 82.69 against the Australian dollar.

On the downside, the Japanese unit may find target levels at 80.30 against the greenback, 103.90 against the euro, 128.40 against the pound, 85.80 against the Swiss franc, 65.90 against the kiwi, 80.20 versus the loonie and 83.0 against the aussie.

Looking ahead, Japan's vehicle production report for September is due out at 12:00 am ET.

The Swiss UBS consumption indicator for September, Spanish third quarter GDP, German jobless rate for October, eurozone business climate indicator, consumer confidence, service and industrial confidence indexes-all for October are expected in the European session.

The S&P Case/Shiller home price index for August, the U.S. consumer confidence for October and the Canada industrial product price and raw materials price indexes for September are due out in the North American session.

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