Market Commentary Japan

The dollar/Japanese yen remains the odd major pair out, and its lack of direction should continue. Yen crosses should help with direction.

Japanese retail trade rose to +0.7 percent in August from +0.1 percent in July, but slowed to 0.7 percent on a yearly basis from 2.0 percent.

That was the exception to the rule, as the rest of the economic data was atrocious.

Industrial production contracted 3.5 percent in August, the fastest pace in at least five years, after expanding 1.3 percent in July, while the unemployment rate rose to a two-year high of 4.2 percent from 4.0 percent previously and household spending contracted 4 percent, the most since September 2006, after -0.5 percent previously.




Housing starts for 53.6 percent in August on the year from 19.0 percent previously.

Construction orders contracted 0.3 percent in August on an annual basis from +42.3 percent in July.

The index of small business confidence slipped to 40.2 in September from 41.4 previously.

On this milieu, the Tankan index of confidence among big makers of cars and electronics fell to -3 in the third quarter from 5 in the second quarter. This is the first time that pessimists outnumbered optimists since 2003.