Stronger Yen

July 26, 2013

The yen is 0.7% stronger against the dollar and hit an overnight high of 98.26/USD following the release of Japanese CPI figures.  Both total (up 0.2% from June 2012) and core CPI inflation (+0.4%) were positive.  Deflation seems to be disappearing faster than anyone imagined.

Tokyo consumer prices in July were 0.2% higher than in June and up 0.4% on year.

The dollar otherwise has risen 0.2% against sterling, the loonie, and the Australian and New Zealand dollars.  The dollar recovered 0.1% relative to the euro but dipped 0.1% against the yuan.

Share prices in the Pacific Rim plunged 3.0% in Japan on a stronger yen.  Other market losses amounted to 0.6% in China, 0.5% in the Philippines, 0.3% in India and Indonesia, and 0.2% in Taiwan.  In Europe, Spain’s IBEX is 1.0% higher, but the German Dax and British Ftse have lost 0.7% and 0.5%.  The DJIA fell 0.4% within the first 15 minutes of trading.

The ten-year British gilt yield slipped four basis points.  U.S. Treasuries and Japanese JGBs are each down two basis points, while the German bund edged a basis point lower.

WTI oil declined 0.7% to $104.80 per barrel.  The price of gold lost 0.4% to $1322.90 per ounce.

German import prices sank 0.8% in June but recorded a smaller 2.2% 12-month rate of decline.  Energy prices fell 3.6% on year, while non-mineral oil import prices were 2.6% lower.

Investors were surprised to learn that French consumer confidence climbed three points above an upwardly revised 79 reading in June to 82 in July.

S&P revised Iceland’s credit rating outlook to negative.

Sweden recorded a NOK 4 billion trade surplus in June, down from NOK 5 billion in May, and a NOK 38.2 billion surplus in the first half of 2013, down from NOK 41.7 billion in the first half of 2012.  The Greek EUR 1.01 billion trade gap in May was a shade smaller than its April deficit.

The Conference Board’s Ezone index of leading economic indicators rose 0.5% last month even as the index of coincident economic indicators slid by 0.2%.

South Korean consumer confidence remained steady in July.  Singapore industrial production fell 3.1% on month and 5.9% on year in June, considerably worse than forecast.

Chinese business sentiment weakened 2.4 points to a reading of 51.3 this month.

The final Reuters/U. Michigan gauge of U.S. consumer sentiment was revised from an initially estimated 83.9 score to 85.1.  That’s a full point better than in June and the best result since July 2007.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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