The yen has posted slight gains in the Tuesday session. In North American trade, USD/JPY is trading at 112.38, down 0.21% on the day. On the release front, Japanese All Industries Activity declined 0.5%, edging below the forecast of 0.5%. This marked a second decline in just three months. In the US, Existing Home Sales jumped to 5.48 million, above the estimate of 5.42 million. Later in the day, Federal Reserve Chair Janet Yellen will speak at an event in New York City.
US construction numbers continue to beat expectations. On Monday, it was the turn of Existing Home Sales, which climbed to a 4-month high. On Friday, Building Permits and Housing Starts impressed the markets. Building Permits for single-family homes jumped to 1.30 million, above the estimate of 1.25 million. The annualized pace of 839,000 building permits in October was the fastest since September 2007. Housing Starts also sparkled, accelerating to 1.29 million, compared to an estimate of 1.19 million. The catalyst for the strong numbers were hurricanes Harvey and Irma, which caused massive damage in the southern part of the US. With rebuilding efforts well underway, construction numbers should remain strong in the fourth quarter.
Strong Japanese exports boosted the October trade surplus to JPY 0.32 trillion, well above the forecast of JPY 0.21 trillion. China is showing some momentum after a recent slowdown, and this has buoyed demand for Japanese automobiles, electronics and machinery. The robust manufacturing and export sectors have fueled a moderate recovery, as Japan has now posted seven consecutive quarters of growth, the longest economic expansion since 2001. Although the economy has improved in 2017, but this has not translated into higher inflation levels. Inflation remains persistently below the inflation target of around 2 percent, but the Bank of Japan has no plans to change policy. On Monday, Prime Minister Shinzo Abe said that the government and the BoJ would work together and take all needed steps to combat inflation.
