Yen Steady After BOJ, Aussie Up On Job Data

It's a rather busy Asian session today with a long list of economic data released from China, Japan, Australia and New Zealand. Aussie and Canadian strengthened broadly on overall risk appetite while the former was given additional boost from economic data. European majors continued to consolidate against dollar, without any clear direction. The Japanese yen was a touch lower after BoJ rate decision but quickly settled back into familiar range.

BoJ left rates unchanged at 0-0.1% today as widely expected and refrained from expanding the JPY 70T stimulus program. The JPY 45T asset purchase target and JPY 25T loan program was kept unchanged. The bank also pledged to "proceed with monetary easing in a continuous manner by steadily increasing the amount outstanding of its asset purchase program."

Two former economists attended the meeting as member for the first time and both didn't propose additional easing. BoJ noted that pick-up in exports has "moderated" and production has been "relatively weak," which was a downgrade of the prior meeting's view. Nonetheless, "firm domestic demand" is helping the economy to pickup. Analysts are expecting BoJ to expand the stimulus ahead but it's believed the timing would very much depends on when and what additional stimulus Fed would adopt. Data from Japan saw household confidence dropped to 39.7 in July, housing loans rose 2.7% yoy in Q2, machine orders rose 5.6% mom in June.

Employment data from Australia was solid, with 14k growth in July comparing to 10k. Unemployment rate also dipped back to 5.2%. The growth number erased nearly half of June's -28.3k contraction. RBA Stevens noted in the statement earlier this week that domestic growth will be "close to trend" while the job market has shown "moderate" growth in employment.

Today's data was affirmative to Steven's view and will strengthen RBA's stance to wait-and-see in near term. In contrast, New Zealand's job market unexpectedly contracted -0.1% qoq Q2, comparing to expectation of 0.4% growth. Unemployment rate also unexpectedly rose to 6.8%. And Kiwi clearly lagged behind Aussie and Loonie after the data.

China's CPI inflation cooled for the fourth month in a rose to 1.8% yoy in July. While that's above market expectation of 1.7% yoy, the deceleration in CPI should give the government more room for additional stimulus measures to ensure soft-landing, with hope of reversing the slowdown. PPI dropped -2.9% yoy in July while industrial production rose 9.2% yoy, retail sales rose 13.1% yoy, fixed asset investment rose 20.4% ytd/y and all are below consensus.

Looking ahead, ECB will release monthly bulletin in European session, together with UK trade balance. Canadian housing data and trade balance will be featured. From US, trade balance, jobless claims and wholesale inventories will be released.