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Forex - Yen gains as market digests higher core CPI in Japan

Published 07/30/2015, 09:36 PM
Updated 07/30/2015, 09:37 PM
Yen gains as markets digest CPI data
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Investing.com - The Japanese yen gained on Friday as investors saw the core consumer prices rise in June as positive even as other Japanese data on jobs and household spending was downbeat.

USD/JPY traded at 124.00, down 0.12%, while AUD/USD changed hands at 0.7297, up 0.05%.

Core consumer prices gained 0.1% in June year-on-year, compared to an expectation for a flat outcome. Japan's unemployment rate came in at 3.4%, a tick higher than the 3.3% seen while household spending fell 2.0%, well off a 1.7% gain expected.

The ANZ business confidence & activity outlook survey for July in New Zealand fell to minus-15.3, a six-year low, from minus-2.3 in June, the second straight monthly decline. The June confidence was the first drop since February 2011.

In Australia, the RBA's private sector credit data rose 0.4%, below the 0.5% month-on-month rise seen. PPI rose 0.3% in the second quarter, well below the 0.6% gain seen., while housing credit was up 0.6%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.07% to 97.54.

Overnight, the dollar extended gains against the other major currencies on Thursday, after data showing that U.S. economic growth accelerated in the second quarter added to expectations for a rate hike later this year.

The Commerce Department said U.S. gross domestic product expanded at an annual rate of 2.3% in the three months to June. First quarter growth was revised up to 0.6% from a previously reported contraction of 0.2%.

Although economists had forecast growth of 2.6% the report still indicated that the economy is on a solid footing.

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 25 rose by 12,000 to 267,000 from the previous week’s total of 255,000. Analysts had expected initial jobless claims to rise by 15,000 to 270,000 last week.

The data came after the Fed said in its rate statement on Wednesday that the economy and the labor market had continued to strengthen, reinforcing expectations for an initial rate hike at its September meeting.

Fed officials said they felt the economy had recovered from a first-quarter slowdown and was now "expanding moderately."

Fed Chair Janet Yellen has said the central bank could raise rates as soon as September if the economy continues to improve as expected.

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