As I had anticipated the Japanese employment and production came out strong but spending was weak. Retail sales did show an increase however and CPI was even more than expected. The BOJ’s suspicions that it would turn positive were confirmed and the increase in prices was quite significant. This will no doubt fuel speculation of a rate hike in the early part of next year out of Japan. In any case this data did help USD/JPY reach 113 as I had expected it too. I see a big increase in the value of yen coming as soon as next week. Meanwhile New home sales were very weak in the U.S. and stocks and the dollar suffered from the news. Position squaring is still to be expected this afternoon as savvy trader’s book profits before the holiday and year end. Meanwhile UK house prices did decline quite a bit more than economists expected and the Pound was unable to break $2. German CPI came in below market expectations but right around where I guessed it would. Long story short what I told you yesterday has come to fruition today. Staying out of the markets this afternoon might be a good idea. Next week will provide plenty of chances to make money. Expect position squaring to account for most of the trading this afternoon which will help stabilize the battered dollar heading into the weekend and lack of any interesting plays.
