Japanese Yen Rises as Risk Aversion is Back

Market Reviews

The euro fell on weak economic data. Eurozone PMI manufacturing dropped to 51.5 in November, down from 52.0, missed expectation of 52.0. That’s the lowest reading in 30 months. PMI services dropped to 53.1 (the lowest reading in 25), down from 53.7 and missed expectation of 53.6. PMI composite dropped to 52.4, down from 53.1, the lowest level in 47 months.

Also released today, Germany Q3 GDP was finalized at -0.2% qoq. Germany PMI manufacturing dropped to 51.6 in November (the lowest level in 32 months), down from 52.2 and missed expectation of 52.2. PMI services dropped to 53.3, down from 54.7 and missed expectation of 54.5. PMI composite dropped to 52.2, down from 53.4, hit a 47-month low.

Canadian dollar drops, despite strong economic data. The CAD weakens, as WTI crude oil is extending recent free fall. Canada headline CPI accelerated to 2.4% yoy in October, up from 2.2% yoy and beat expectations of 2.2% yoy. CPI core was unchanged at 1.9% yoy. CPI core median was unchanged at 2.0% yoy. CPI core trim was also unchanged at 2.1% yoy. Headline retail sales rose 0.2% mom in September, above expectation of 0.0% mom. Ex-auto sales rose 0.1% mom only, below expectation of 0.3%.

Japanese yen rises broadly today as risk aversion is back. The yen accelerated growth against the US dollar, and peaked on November 21, amid increased risk aversion. Now, the USD/JPY pair is trading at Y112.70, down 0.21%. US dollar and Swiss franc are following as the second and third strongest for now. New Zealand dollar is the weakest one for today, followed by euro and the British pound.

On stock markets, FTSE lost 1.1%, DAX fell 0.73%, CAC dropped 0.63%. Earlier today, Nikkei rose 0.65%, Hong Kong HSI added 0.18%, Singapore Strait Times gained 0.09%, but China Shanghai SSE dropped 0.23%.