ForexLive Asian market wrap: China flash PMI slightly improved at 49.1

The HSBC flash PMI came in at 49.1, up from 48.3 last month but still signifying industry contraction. Australian PPI -0.3% QoQ which equates to +1.4% YoY, which is much lower than expected Sarkozy to have two-way Presidential election with Hollande GBP: FX component for HSBC's quarterly dividend to be transacted today (usually GBP positive) Regional Bourses -0.5% on average Gold $1642/oz; Oil $103.75/bbl A report from a US bank that further BOJ easing is by no means an absolute certainty set the tone for the session and the JPY has been well-bid across the board. AUD/JPY was as usual the lead pair and as risk-off sentiment increased, so too did the selling in this 'barometer' pairing. AUD/JPY fell to its session lows just after the very low Australian PPI data and the subsequent slight improvement in then China flash PMI helped it off these lows. Ranges: USD/JPY 81.23/66; AUD/JPY 83.86/84.73 AUD/USD has traded with a heavy tone again although the market will wait until tomorrows CPI data is known before making any big plays. Although there is no direct correlation between PPI and CPI, the recent big fall in export prices and the big fall in the PPI would seem to increase the chances that the CPI will also fall enough to push the RBA into a rate cut. The modest improvement in the HSBC flash PMI did alleviate the heavy 'risk-off' tone. Ranges: 1.0322/84 EUR/USD did try to fall in early interbank trade, as the French election results were filtering through. The strong showing by the right-wing candidate and the liklihood of a victory by the Socialist (anti-austerity) candidate were seen as EUR negatives. This didn't last and the trading range has been fairly tight, 1.3175/1.3210 Cable 1.6103/33; EUR/CHF 1.2013/19