The Chinese data incited a risk-off mood in currency markets. The Australian Dollar dwindling alongside its New Zealand counterpart as China reported a round of disappointing economic figures.
Earlier today, the Japanese Yen rose despite Japan’s disappointing second-quarter GDP data release as output rose at an annualized rate of 2.2 percent, below the expected 2.5 percent baseline. An unexpected rise in the GDP deflator might have pushed the currency to buoyancy.
The priced-in three-year BOJ policy path implied in rates markets has not been budgeted from last week. A return from the negative territory on the benchmark lending rate is not expected until at least the second quarter of next year.
The Yen continued to move higher all the same, however, reeling in China’s rate cuts. The weakness in China’s economy appeared to inspire a broader risk-off tone, at least in the G10 FX space. The Japanese unit tellingly rose with the safety-minded US Dollar.
Asia-Pacific currency has brushed off negativity, tracking up 0.6 percent on average in afternoon trade. European shares are also indicated to open in the green.
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