ForexLive Asia Wrap: Japan CPI Shows Continued Deflation

Japan CPI Nationwide for December came in at -0.1% YoY (vs. -0.2% expected) Japan CPI: December Core Consumer Prices -0.2% on year (CPI ex-food), on expectations Japan CPI: December Nationwide Ex Food & Energy came in at -0.6% YoY (vs. -0.5% expected) BOJ Dec 19-20 Policy Board Meeting Minutes released China MNI January Business Sentiment Indicator 55.16 (December was 52.22, November was 53.78) The Japanese Finance Minister, Aso, commented: BOJ easing is aimed at beating deflation, not currency manipulation and Excessive Yen strength is being corrected Rumours that the UK GDP figure would be +0.2% (against consensus view of -0.1%) Most of the action today was in the early morning, with USD/JPY continuing the late part of its rally to a high of 90.69. Talk of the 90.75 DNT option seemed to cap it and it traded back to 90.30. It spent the balance of the day around 90.50 in a tight range. The AUD lost more ground through the session, but the move was limited – to a low of 1.0439 before tracking sideways around 1.0440 for the rest of the day. NZD, too, continued its overnight slide, but the fall slowed substantially; NZD low was 0.8365. GBP/USD shrugged off some rumours of a better than expected Q4 GDP (see bullets, above) drifting a little lower through the session to register 1.5770. EUR/USD … sshhh … you might wake it up. Tight range, but a little lower on the session ahead of the expected LTRO repayment announcement at 1100GMT.