Asian markets drop on weak Japanese data; Yen favoured ~ Forex Special

Friday, July 30, 2010

Asian markets drop on weak Japanese data; Yen favoured

Forex Special

Asian markets have gone through losses on Friday's session after a string of dull macroeconomic figures in Japan, which have outweighed strong corporate earnings. In Forex markets, the Yen strengthened further on risk aversion, while Euro and Pound traded in range.

Japanese Nikkei Index dropped 1.7% after the unexpected 1.5% decline on industrial production, and consumer prices, which dropped in June for the 16th consecutive month, dampened optimism triggered by strong corporate earnings figures released by Sony and Sony Corp. and Nissan Motor Co.

South Korean Kospi Indexx fell 0.8% and Australian S&P/ASX 200 Index declined 0.7%m, while Chinese Shangai Composite Index dropped 1.2%.

Yen rallies on as macroeconomic data disappoints

USD/JPY continued its journey south on Friday's Asian session, and retreat from 88.10 on Wednesday extended after the release of downbeat Japanese data, to key support area at 86.25/35 which is being tested ahead of the European session opening.

EUR/USD upleg from 1.2730 low last week extended somewhat higher on Thursday, and the pair broke above 1.30455 resistance which has turned into support as the pair consolidates at 11-week high below 1.3100.

GBP/USD rally from 1.5120 low last week extended yesterday to a fresh 5-month high at 1.5660, where the pair was capped and turned back to resume consolidation around 1.5600.