Yen rises on weaker dollar and strong Japanese data

The yen firmed against major currencies on Wednesday as fading risk appetite and weak US data weighed on the dollar. Hourly output per worker in the US fell for the third straight quarter, raising concerns about the prospect of future GDP growth in the US. The dollar slipped below the 102 level against the yen after the data and drifted further lower in Asian trading today to stand at 101.40 yen in late session.

Further aiding the yen today were stronger-than-expected Japanese machinery orders. Core machinery orders rose by 8.3% month-on-month in June – the first increase in three months and sharply above estimates of 3.1%. The data was accompanied by a positive outlook by companies about orders for the current quarter, suggesting rising business spending over the period.

The Australian dollar was also boosted by positive data, helping it climb to fresh 2½-month highs against the greenback. The Westpac consumer confidence index rose by 2% in August - the first increase in forex, dollar, Australian do three months. The aussie broke above the 0.77 level in Asian trading today for the first time since early May, before easing to just below the level in late session.

In European currencies, the euro and the pound both firmed against the retreating dollar though the pound’s gains were more contained. Sterling hit a session high of 1.3089 dollars before easing to 1.3040 in late Asian trading, but the euro stood comfortably above the 1.11 level at 1.1148 dollars.

Disappointing French industrial production figures failed to make much of a dent in the euro’s gains.

Crude oil prices came under pressure again yesterday after the latest weekly oil inventory data from the American Petroleum Institute showed US crude stocks rose in the week ending August 5 instead of an expected drawdown. Oil prices reversed earlier gains that had taken it to 2-week highs to end the day lower. WTI oil futures fell further today and were last trading at $42.33 a barrel.

Gold prices were lifted however from the weaker dollar, which helped the yellow metal higher in Asian trading today. The yellow metal was last up 0.8% at $1351 an ounce.

The rest of the day is looking relatively quiet with no major data expected apart from the JOLTS job openings in the United States and the latest EIA oil inventory data.