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Yen rises further in Asia

On Thursday, the Japanese yen managed to gain in Asia, right after corporate price index data came in as predicted. Meanwhile, the Australian dollar rebounded following a mixed set of capital expenditure figures. 

The currency pair USD/JPY dipped 0.51%, trading at 109.62, while AUD/USD closed +0.18% at 0.7211.

In Japan, the corporate services price index edged up 0.2% year-on-year.

In Australia, building capital expenditure went down7.9%. That’s more than double the 3.0% dip month-on-month expected already in the first quarter. As for plant and machinery capital expenditures, they eased 0.5%. Secondly, private new capital expenditures sagged 5.2%, which is more than the 3.0% sink observed quarter-on-quarter.    

The drop in capex in the first quarter appeared to be more than expected, though the outlook for 2016-17 capex was somewhat better than supposed. The RBA is going to watch it very attentively because the ongoing rebalancing of the economy away from resources depends mostly on growth in the services sector.

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