USD/JPY is stable on Wednesday, as USD/JPY is trading in the mid-120 range. In the US, today’s highlight is Unemployment Claims. The key indicator is usually released each Thursday, but has been brought forward due to the Christmas holiday. The markets are not expecting much change from the previous release, with the estimate standing at 291 thousand. Over in Japan, the BOJ will release the minutes of last week’s policy meeting as well as the Services Producer Price Index, which measures corporate inflation.
In the US, there were a host of key events on Tuesday, with mixed results. GDP was red-hot in Q3, jumping 5.0%, ahead of the estimate of 4.6%. This marked the indicator’s strongest gain since the third quarter of 2003. The US economy is expected to continue to surge in 2015, driven by increased consumer spending and lower oil prices. The news was not as positive from Core Durable Goods Orders, which posted a decline of 0.4%, its fourth decline in five readings. The reading was well off the estimate of 1.1%. Durable Goods Orders looked even worse, with a reading of -0.7%. This surprised the markets which had anticipated a strong gain of 3.0%.
Elsewhere in the US, housing data continues to weaken as New Home Sales slipped to 438 thousand, its poorest showing since July and well short of the forecast of 461 thousand. UoM Consumer Sentiment continues to rise, hitting 93.6 points in December. This marked its highest level since February 2007, as the US consumer remains very optimistic about the economy as we move into 2015.
Japanese Prime Minister was re-elected by parliament on Wednesday and can now get back to the tough task of tackling the sluggish Japanese economy. Abe billed the election as a mandate on his “Abenomics” platform, which has included radical monetary easing and more government spending. The government’s economic platform has eliminated deflation, but the yen has plummeted as it trades around the 120 level. The weak yen has curtailed domestic demand, which has also been hurt by a sales tax hike which was introduced earlier in the year.
USD/JPY 120.44 H: 120.71 L: 120.28
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