Asia Round Up: Yen supported above 125.00 levels on Japan’s data- June 8th, 2015

Market Roundup

• G7 leaders urge tough line on Russia at Alpine summit; Obama and Merkel agree Greece must reform.
  
  
• Japan PM spokesman - Economy returning to growth orbit.
  
  
• Japan CoC Mimura - More JPY declines undesirable for small firms.
  
  
• Japan Q1 revised GDP +1.0% q/q, +0.7% eyed, prelim +0.6%, +3.9% AR vs +2.7% and +2.4%, Q1 CAPEX +2.7% q/q vs +2.3% and +2.4%, domestic demand contribution +1.1%.
  
  
• Japan April current account in surplus, trln, trln eyed, trade/services balance still in red to tune of Y670.7 bln but capital acct + trln.
  
  
• MoF May flow data - Japanese buy net Y629.0 bln foreign stocks, trln bonds (banks, lifers good buyers), Y185.8 bln bills; foreign investors buy trln Japanese stocks, sell Y492.5 bln bonds, buy trln bills.
  
  
• Japan May bank loans +2.6% y/y to trln, April +2.6%, March +2.6%.
  
  
• IMF Furusawa - Risks from Fed rate hikes, FX intervention-capital flow management could be used in certain situations.
  
  
• Japan, China FinMins concerned over volatile commodity prices.
  
  
• China May trade surplus $59.49 bln, $44.95 bln eyed, exp -2.5% y/y imp -17.6%.
  
  
• NZ Q1 wholesale sales -0.8% q/q, +1.8% y/y, Q4 '14 rev -0.2% q/q.

Economic Data Ahead

• (0200 ET/0600 GMT) Germany April industrial output, +0.5% m/m eyed; last -0.5%.
  
  
• (0200 ET/0600 MGT) Germany April trade balance, E19.4 bln surplus sa; last E19.3 bln surplus.
  
  
• (0430 ET/0830 GMT) Euro zone June Sentix index, 18.7 eyed; last 19.6.
  
  
• (1000 ET/1400 GMT) US Jun employment trends index; last 128.2.

Key Events Ahead

• Australia Queen's Birthday holiday.
  
  
• N/A Bank of Portugal summer economic bulletin.
  
  
• N/A Germany E2 bln 6-mo Bubill, France BTF treasury note auctions.
  
  
• (0245 ET/0645 GMT) Spain/USCoC Madrid conference, EconMin Malo de Molina speech.
  
  
• (0400 ET/0800 GMT) ECB/Austria CB Nowotny presents latest economic forecasts.
  
  
• (1030 ET/1430 GMT) IMF Sosa presents Spain annual review in Madrid.
  
  
• N/A IEF Americas Conference of Montreal (till June 11), various speakers.
  
  
• (1100 ET/1500 GMT) Ex-Fed Volcker New York press conference on report finance/state budgets.
  
  
• (1200 ET/1600 GMT) ECB Mersch speech at Frankfurt Zeit IHK conference.
  
  
• (1315 ET/1715 GMT) German FinMin Schaeuble speech at Frankfurt Zeit IHK conference.

FX Recap

EUR/USD is supported just around 1.1100 levels and currently trading at 1.1099 levels. It has made intraday high at 1.1111 and low at 1.1083 levels. On Friday US Nonfarm payroll data released with positive numbers and pair dropped to 1.1048 levels. Today main data from the Euro zone will be Germany industrial production, trade balance as well as Euro Zone Sentix investor confidence. Initial support is seen at 1.1010 and resistance is seen around 1.1160 levels.

USD/JPY is supported above 125.00 levels and posted a high of 125.66 levels. It has made intraday low at 125.28 and currently trading at 125.45 levels. The pair trades in red in Asia largely on the back of better than expected Japan's revised growth forecasts for the first quarter which provided the much needed impetus to the Japanese yen. Japan's economy grew 1.0% in the January-March period, according to revised data from Japan's Cabinet Office, having initially reported growth of 0.6% Q1 2015.  Near term resistance is seen at 125.86 (June 5 high) and support is seen at 125.29 levels.

GBP/USD is supported just below $1.5300 levels. It made an intraday high at 1.5273 and low at 1.5252 levels. Pair is currently trading at 1.5263 levels. There is no major data from the UK, expecting range bound movement from the parity. Initial support is seen at 1.5189 and resistance is seen around 1.5368 levels.

USD/CHF is supported above 0.9400 levels and trading at 0.9412 levels and made intraday low at 0.9395 and high at 0.9418 levels. In the absence of any macro economic data from Switzerland, market will eye on US data due later in a day. Near term support is seen at 0.9296 levels and resistance is seen at 0.9500 levels.

AUD/USD is supported just above 0.7600 levels and trading at 0.7612 levels. It has made intraday high at 0.7644 levels and low at 0.7605 levels. Most Australian banks will be closed in observance of the Queen's Birthday. Today in Asian trading session, China released trade balance data with positive numbers but movement was very less on AUD parity. Initial support is seen at 0.7568 and resistance at 0.7739 levels.