ForexLive Asia-Pacific wrap: Japan deflating again

Japan June CPI -0.2% y/y vs 0.0% exp Tokyo July CPI -0.8% vs -0.6% exp Japan retail sales +0.2% vs +1.1% exp Chinese industrial profits fall for third straight month BOJ's Yamaguchi: Gov't must reform to keep bond market credibility MNI China business sentiment mproved slightly to 49.73 from 49.63 Starbucks blames earnings miss on global economy IMF Western Hemisphere director quits US Senator looks to block Chinese-Canadian takeover Nikkei +1.4% ASX +0.9% AUD leading, GBP trailing A grind lower in EUR/USD in the early going, taking out the US afternoon lows, down to 1.2270 and then a slow rebound back to 1.2290. Perhaps some minor buy stops above 1.2293. Same pattern in cable, down to 1.5666 but not bouncing as firmly. Spot at 1.5681 as it gives back some of the outsized gains from yesterday. USD/JPY rallied to the highest levels since Monday, at 78.35 after the CPI figures prompted speculation about further deflation-fighting measures from the BOJ. Bot the move was short-lived, drifting back to 78.23. The commodity bloc is well-bid, up about 15 pips. Asia stocks maybe a touch softer than you would expect given the strength in Europe and the US.