Stock Rebound Continues, Yen Back Under Selling Pressure

Asian markets opened broadly higher following another day of rebound in Dow. Dow rose for the third day to close above 15000 pts again at 15024 as the fear on Fed's tapering receded. Gold dropped below 1200 level to as low as 1179.4 before recovering. Meanwhile, dollar index started to lose some upside momentum after hitting as high as 83.43 and is hovering around 83 level at the time of writing. In the currency markets, dollar remains mixed as on the one hand, it's reversing some gains against European majors. But at the same time, it's also paring some losses against commodity currencies. The clearer trend is seen in yen which is back under selling pressure of risk appetite as well as a batch of solid Japanese data.

In US, Fed governor Powell noted recent markets adjustments since May "have be larger than would be justified by any reasonable reassessment of the path of policy". Meanwhile, New York Fed Dudley said the expectations of early exit are "quite out of sync" and "a rise in short-term rates is very likely to be a long way off". Atlanta Fed Lockhart used an analogy and said Bernanke was talking about using the "patch" flexibly but markets reacted as if he said "cold turkey".

In Japan, the national CPI core was flat at 0% yoy in May which was a notable improvement from April's -0.4% yoy. The depreciation in yen this year was seen as a factor supporting prices and helped the country avoided deflation. Tokyo CPI rose 0.2% yoy in June, up from May's 0.1% yoy. Other data saw manufacturing PMI improved to 52.3 in June, industrial production rose 2.0% mom in May, retail sales rose 0.8% in May, all are quite solid. Though, household spending dropped -1.6% yoy in May.

Other data released so far include New Zealand building permits rose 1.3% mom in May. UK Gfk consumer sentiment rose slightly to -21 in June. Swiss KOF, UK house price, index of services, German CPI and retial sales will be released in European session. Canadian GDP, IPPI and RMPI, US Chicago PMI will be featured in US session.