The Yen extended losses against the U.S. Dollar and the majority of its trading counterparts while it struggled to retain prior gains as the Nikkei posted big declines on Friday and industrial and manufacturing production were down.
Japan Posts Lackluster Data
The Yen continued to depreciate against the greenback and most of the online Forex majors on Friday as Japan reported that activity for the manufacturing sector only went up 0.5 percent, while economists had predicted it would post a 2 percent hike. The Nikkei sustained declines due to the disappointing figures, and some analysts believe that it would have sustained an even bigger loss had it not been for the fact that the Manufacturing PMI index showed gains while consumer prices increased at a quicker rate. However, the greenback rose to the highest price in six months versus the Yen on speculation that the Bank of Japan may decide to alter the stimulus program in order to ensure that country maintains its current level of economic progress. Officials have indicated that much work remains to be done as unemployment continues to rise. The Yen traded low against the Euro rate on reports indicating that the E.U.’s annual inflation rate climbed more than forecast in the month of November. According to Eurostat, consumer inflation went up from a four-year record low of 0.7 percent to 0.9 percent. The shared currency was also fueled by other news confirming that the rate of unemployment dipped from 12.2 to 12.1 percent in October. In the days ahead, market traders will shift their focus to the U.S. where the non-farm payrolls will be released, which are expected to offer clues on what the Federal Reserve may do next.
Aussie Retreats From 3-Month Low
Australia’s Dollar recovered from three-month lows versus its U.S. peer even as the greenback continued to receive support on predictions that the U.S. central bank will begin winding down its stimulus program before end of year. The Aussie came under pressure after the Deputy Governor of the Reserve Bank of Australia, Phillip Lowe, said that the bank may still decide to intervene in the market in an effort to debase the monetary unit. Tomorrow, investors will pay close attention to the RBA as it conducts its monthly meeting. Forex traders will also focus on the bounty of economic release due out this week which will include data on GDP and retail sales. New Zealand’s Dollar dipped slightly despite positive metrics issued last week denoting increases in business confidence.