European FX Open - USD/YEN is further pressured

USD/YEN continued its post-ISM and JOLTS misses correction overnight.

A new four week low of 143.19 has panned out, impacted also by overnight events from Japan.

Japanese workers’ real wages rose for a second consecutive month, real cash earnings rising 0.4% y/y vs a -0.6% consensus and 1.1% result the month previous, keeping the BOJ on track to continue its tightening campaign and to perhaps hike rates again before 2024 is out. Also, BOJ Board Member Takata said the Bank will need to adjust the degree of monetary easing further if inflation rises as broadly expected and the sustainability for positive economic activities is confirmed.

Elsewhere, the USD is fairly mixed at the start of the day, with US stock futures once again (in light) negative territory. Overnight, the latest Fed Beige Book showed economic activity in the US was flat or declining across most regions in recent weeks and some investors could well be re-pricing a more aggressive -50BPs easing cycle start on the 18th rather than the more traditional -25BPs.

Ahead, there looks to be fairly significant and potentially impacting data through the day.

This commences at the top of the hour with German factory orders for July (forecast at -1.7% m/m) followed by the likes of UK DMP CPI 1-year expectations (seen 2.6% in August vs 2.5%) and EMU retail sales.

In the second half and pre-payroills, the ADP employment change (144k vs 122k) initial claims will garner plenty of interest as will the ISM services index after. The latter is expected to stay at 51.4 in August (and once again the employment component will be a focus, 51.1 last time out).

And, ECB's Holzmann is a scheduled speaker.

Overnight, RBA governor Bullock suggested the Bank will struggle to maintain low unemployment if inflation stays above its target level 'indefinitely,' in a warning to households and firms that interest-rate relief is still some way off.

Meanwhile, Bbg reports US Democrat presidential candidate Kamala Harris called for a 28% capital gains tax rate on people earning Usd 1mln-plus, touting it as a measure that would ensure the wealthy paid their fair share as she sought to detail her economic agenda and draw a contrast with Republican rival Donald Trump.

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