The Japanese yen has posted considerable losses in the Monday session, erasing Friday’s gains. In North American trade, USD/JPY is trading at 112.40, up 0.45% on the day. On the release front, Japanese retail sales posted a strong gain of 2.1%, matching the forecast. In the U.S, the Core PCE Price Index gained 0.2%, edging above the estimate of 0.1%. Personal spending edged up to 0.4%, matching the forecast. However, personal income dipped to 0.2%, its lowest level since August 2017. On Tuesday, the U.S releases CB consumer confidence. In Japan, the BoJ winds up its policy meeting and will release a policy statement.
Japanese retail sales posted gains for a 11th straight month, on an annualized basis. The Japanese Ministry of Economy, Trade and Industry (METI) noted that high costs for food and energy boosted retail sales. METI upgraded its assessment, saying that retail sales were improving “gradually”. However, stronger consumer spending failed to boost the yen, which has started the week with losses. The markets are keeping a close eye on the Bank of Japan, with policymakers expected to maintain the current monetary policy.
Last week ended on a high note, as Advance GDP posted an impressive gain of 3.5%, above the estimate of 3.3%. This was down from the sizzling Final GDP for Q2, which came in at 4.2%. Still, analysts were not expecting a repeat of the Q2 performance, and the U.S dollar moved higher on Friday. With global stock markets spiraling lower, risk appetite has dampened as investors flock to the U.S dollar at the expense of the Canadian dollar and other currencies. A rash of geopolitical hotspots has weighed on investor sentiment, including the spike in Italian debt, the Brexit impasse and the U.S-China trade war.
