Last week’s USA retail sales, Producer Price Index (a key inflation indicator), and consumer sentiment data all surprised significantly to the downside. The yen held gains as gold and government debt advanced.
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Japan’s economy barely grew in the April-June quarter, as weaker exports and business investment weighed on the faltering recovery.
United States crude rose for a third day, while nickel tried to rebound from its worst rout since early July.
As on Monday, the Asian shares bounced from a one-year peaks after Japanese data revealed that China’s economy hit a seven-month top.
US retail sales growth was unexpectedly flat in July as consumers cut back on buying clothes and other goods, while the producer price index fell 0.4 percent in July, the biggest drop in almost a year.
Dow Jones also reported that the company was weighing the sale of its sexual wellness division, which makes condoms.
“The number confirmed that there are still risks in the global economy”, said Kuwahara.
“Still, weak numbers mean concern over tightening recedes”, he said.
“The government has already announced a big stimulus package, so the next question is how the Bank of Japan will respond after its comprehensive policy review, which is sure to lead to a delay in its price target”. The Nikkei was down 0.3% in early trade; the data were released just prior to market open. Net exports subtracted 0.3 percentage point from GDP.
The MSCI Asia Pacific Index dropped 0.4% to 139 as of 11:07 a.m.in Tokyo.
USA retail sales growth was unexpectedly flat in July as consumers cut back on buying clothes and other goods, while the producer price index fell 0.4 percent in July, the biggest drop in almost a year. In Japan, the Topix index slipped 0.2 per cent amid trading volumes nearly 40 per cent below the 30-day average. There is the rally in the yen and worries about Japan’s prospects in overseas markets.
But others see a positive side, accounting for the leap year.
Futures on the S&P 500 Index added 0.1 per cent to 2,182, after the underlying stock measure gave up that amount on Friday, falling from a record high.
USD/JPY changed hands at 101.33, up 0.06%, while AUD/USD traded at 0.7650, up 0.05%.
This combination of a very resilient Japanese yen and lagging U.S. dollar has served to pressure USD/JPY back down towards major psychological support around the 100.00 level. The Australian dollar was flat at $0.7646. Brent crude, used to price global oils, added 10 cents to $47.07 a barrel, after gaining 93 cents on Friday.
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In commodity markets, oil prices edged higher after boasting gains of 6% last week as Saudi Arabia’s oil minister held out the chance of action to help stabilise the market. Switzerland is to publish data on producer prices.
