The Japanese yen is calm at the start of the new trading week, as the pair trades in the mid-109 range on Monday. Japan will release three important indicators later in the day – Household Spending, Preliminary Industrial Production and Retail Sales. Any unexpected readings could shake up USD/JPY. Over in the US, today’s highlight is Pending House Sales. After a sharp gain of 3.3% in July, the markets are braced for a sharp downturn, with an estimate of -0.4%.
Japanese inflation releases continue to look strong, as underscored by the August numbers. Tokyo Core CPI, the primary gauge of consumer inflation, posted a strong gain of 2.6%, just shy of the estimate of 2.7%. National Core CPI and the Services Producer Price Index, which measures corporate inflation, also met expectations. The elimination of deflation, which hobbled the Japanese economy for years, has been a key platform for the government and BoE, and this has been largely achieved, as inflation levels have dramatically risen in the past year.
In the US, Core Durable Goods Orders posted a strong gain of +0.7%, bouncing back from the previous reading of -0.8%. Durable Goods Orders continues to take its riders on a roller coaster ride, plunging 18.2% in August, compared to a huge gain of 22.6% a month earlier. Unemployment Claims rose to 293 thousand, within expectations.
USD/JPY 109.37 H: 109.74 L: 109.26
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