Forex - Yen slightly weaker on downbeat data, Aussie up ahead of China

Investing.com - The Japanese yen weakened slightly on Thursday after downbeat data, while the Aussie dollar gained on an inflation survey that ticked up in October.

USD/JPY traded at 115.56, up 0.02%, while AUD/USD traded at 0.8729, up 0.15%.

Japan reported core machinery orders rose 2.9% month-on-month in October, well above the private-sector core orders forecast for a drop of 1.9% month-on-month, the fifth straight gain. CPGI, excluding sales tax, rose 0.1% year on-year, well below the forecast of a gain of 3.3% on year, but the 19th straight year-on-year increase.

In Australia, the November MI inflation expectations release showed a reading of 2.7% in October, a tick up from 2.6% in September.

The Australian dollar remains above most estimates of its fundamental value but may depreciate closer to the time the U.S. Fed starts to raise its policy rate, Reserve Bank Assistant Governor Christopher Kent said Thursday.

"Once that process is seen to be starting in earnest (or at least much closer to starting) it may well lead to a further appreciation of the U.S. dollar. The flip side of this would be a further depreciation of the Australian dollar which remains above most estimates of its fundamental value - particularly given the substantial declines in commodity prices over the course of this year," Kent said.

In China, October data releases at 1330 local time (0530 GMT), include industrial output, retail sales and fixed-asset investment.

Industrial output is seen steady at 8.0% while January-October fixed-asset investment growth is expected to have fallen for a fourth straight month to just 15.9% year-on-year, the slowest pace of growth since December 2001.

October retail sales growth is expected to have held at September's pace of 11.6% year-on-year.

Overnight, the dollar traded largely higher against its peers on Wednesday in a session void of major U.S. economic indicators, though a lackluster European industrial production report softened the euro and fueled demand for the greenback.

Earlier Wednesday, Eurostat, the European Union's statistical office, reported that industrial production in the euro area increased by 0.6% in September, missing forecasts for a monthly gain of 1.0%. Industrial production in August fell by 1.4%.

Year-on-year, industrial production inched up 0.6% in September from a year earlier, beating expectations for a 0.2% decline and after dropping at a rate of 0.5% in the preceding month.

The lackluster report stoked concerns over the outlook for economic growth in the single currency bloc after weak Italian data on Monday fueled fears that its economy is falling back into a recession.

Meanwhile, the dollar saw demand due to ongoing expectations that the U.S. economy will continue to recover while European and Asian economies take steps to loosen monetary policy to ward off deflationary pressures.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.05% at 87.85.

On Thursday, the U.S. is to publish the weekly report on initial jobless claims.