DOW managed to recover overnight and closed higher by 109.82 pts, or 0.7% at 15848.61. But the mildly positive sentiment wasn't carried through to Asia. Japanese Nikkei is losing -190 pts, or -1.27%, at the timing of writing, trading below 15,000 handle again. Asian markets are relatively quiet elsewhere with China on new year holiday. In the forex markets, Yen is generally higher against other major currencies. In particular, EUR/JPY dips further to as low as 138.66 so far as recent decline extends. USD/JPY and GBP/JPY are soft but manage to stay in recent range. AUSD/USD once again find strong resistance at around 0.88 and weakens mildly.
Economic data from Japan released today are generally positive. National CPI core accelerated to 1.3% yoy in December, beating expectation of being unchanged at 1.2% yoy. That's also the fastest pace since hitting 1.9% in October 2008, that is, more than five years ago. For all of 2013, the national CPI core climbed 0.4%, that's also the first annual rise in five years. Unemployment dropped more than expected to 3.7% in December, the lowest level since December 2007. The manufacturing PMI index also improved to 55.6 in January. Housing starts rose 18.0% yoy in December. Industrial production rose 1.1% mom in December while household spending rose 0.7% yoy, both missed expectations.
So far, improvements were clearly noted in the Japanese economy ever since prime minister Abe launched the so-called Abenomics programs. BoJ is on course to meet the 2% inflation target even though some economists still have doubt on it. But the massive stimulus didn't come without risk. Moody's warned that Japanese banks need to rebalance their portfolios away from JGBs. And, if Abenomics doesn't work, Japan will end up with a bigger pile of debt. Moody's noted that isn't "a zero probability scenario" even though that's not the main one.
Elsewhere, New Zealand trade surplus came in wider than expected at NZD 523m in December. UK Gfk consumer sentiment improved to -7 in January. Eurozone will release unemployment and CPI flash in European session. Canada GDP will be a main feature in US session today. Meanwhile, US will release personal income and spending as well as Chicago PMI.