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Forex - Yen gains as Japan core CPI, household spending support

Published 06/25/2015, 07:56 PM
Updated 06/25/2015, 07:58 PM
Yen stronger after upbeat CPI, household spending
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Investing.com - The Japanese yen gained in Asia on Friday after data on consumer prices, employment and household spending mostly came in better than expected.

USD/JPY traded at 123.58, down 0.04%, while NZD/USD changed hands at 0.6885, down 0.31% following solid trade data.

AUD/USD traded at 0.7731, down 0.10% and EUR/USD was at 1.1203, up 0.01%, as a hard deadline approaches on debt payments.

Japan's blizzard of data showed national core CPI rose 0.1%, a bit better than the flat result expected, though off pace from April's 0.3% rise, while the unemployment rate held steady at 3.3% as forecast with 20,000 jobs added.

More importantly, household spending jumped 2.4% month-on-month in May, beating the 2.2% gain expected and putting it on an annual pace of 4.8%, well above the 3.4% seen, for the first rise in 14 months.

Earlier, New Zealand said that its May trade balance showed a surplus of NZ$350 million, much better than the NZ$100 million deficit seen.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.37.

Overnight, the dollar pared gains against a basket of other major currencies in subdued trade on Thursday, after upbeat U.S. economic reports as investors continued to monitor ongoing Greek debt negotiations.

The Commerce Department said that personal spending rose by 0.9% in May, above expectations for a gain of 0.7%. Personal spending rose 0.1% in April, whose figure was revised up from a previously reported flat reading.

The report also showed personal income rose by 0.5% in May, in line with forecasts and after rising 0.5% in April.

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 20 increased by 3,000 to 271,000 from the previous week’s total of 268,000. Analysts had expected initial jobless claims to rise by 4,000 to 272,000 last week.

Talks between Greece and its creditors remained inconclusive, as discussions continued over the latest proposed reforms from Greece’s creditors and Greece’s counter-proposal.

Greece's Prime Minister, Alexis Tsipras, told European Union Leaders Thursday in Brussels that any deal with creditors "must be viable and have adequate funding" a Greek official told journalists.

Tsipras spoke during the Leaders' dinner where the Greek issue was discussed and according to the official some leaders were "more favorable and some more harsh." Nonetheless, Tsipras expressed his optimism that a deal could be reached by the end of the week.

The Greek premier said that his government presented adequate and credible proposals in line with creditors' demands and that "Greece does not need more austerity but a growth agenda, investments and structural reforms."

Time is running out for the Greek government to secure a deal to unlock bailout funds ahead of the looming deadline for a €1.6 billion repayment to the International Monetary Fund on June 30.

If Greece misses the payment it risks going into default, which could trigger the country’s exit from the euro area.

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