Forex - Yen, Aussie hold weaker despite solid China GDP data

Investing.com - The Japanese yen held weaker in Asia on Tuesday after China reported better-than-expected figures on GDP, industrial output and retail sales.

USD/JPY traded at 118.22, up 0.56%, while AUD/USD changed hands at 0.8198, down 0.16%.

China's fourth quarter GDP rose 7.3%, industrial production gained 7.9% in December and retail sales increased 11.9%, all beating expectations.

Economists expected the government to report that the economy expanded 7.2% year-on-year in the final three months of last year, down on the third quarter's gain of 7.3%, and the slowest quarterly growth rate since the start of 2009.

Retail sales were seen up 11.7% year-on-year in December, unchanged from November and industrial production rose 7.4% in December year-on-year, a gain over November's 7.2% increase.

Overnight, the dollar remained close to 12-year highs against the other major currencies on Monday, as trading volumes were seen to be thin throughout the session with U.S. markets closed for a national holiday.

The euro remained under pressure amid mounting expectations that the European Central Bank will launch a government bond-buying program at its meeting on Thursday, in a bid to stave off the threat of deflation in the euro area.

EUR/USD traded at 1.1582, up 0.19%, in Asia.

An interim ruling last Wednesday, which is likely to be accepted by the European Court of Justice, said the ECB was free to pursue a bond purchasing program without legal challenge.

Last Thursday, the Swiss National Bank abandoned its three-year old 1.20 per euro exchange rate cap in a shock move, signaling that it expects the ECB to act this week.

The dollar and the euro continued to strengthen against the Swiss franc, after plummeting to multi-year lows. USD/CHF fell 0.06% to 0.8789 in Asia Tuesday.

Earlier Monday, official data showed that Swiss producer price inflation fell 0.4% last month, compared to expectations for a 0.6% decline, after a 0.7% drop in November.

The safe haven yen remained supported on Monday as last week’s market volatility meant that investors remained risk adverse.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.26% to 93.09.