Got to keep on watching Japan in Asia. Following a set of poor consumer confidence numbers another slip in the yen has left those one decade lows at the 120 against the US dollar look like a target... (I remain short the yen):
Another exchange rate I have been looking at as a signal is the Australian dollar...
...where I still see the 0.95 level against the US dollar being a huge resistance area due to the some of the growing challenges in the local economy as China slows. Beyond knock-on effects from the mining sector the Australian property sector has long worried me. The Australia Property Forum (@OzPropertyForum) highlighted the continued boom in property lending as a proportion of total lending with the observation that 'Investors are entering uncharted waters; national housing speculation has never been higher'
Or as @brookecorte put it:
'First home buyers cont to disappear from the housing market. Loan figures today show they account for record low 12.2%'.
Not good.
Finally, China. I have talked a lot here about the ongoing microeconomic reform that enables the below more strategic/macroeconomic opportunity to be embraced:
(h/t @wef)
As I have mentioned before I follow the People's Daily (@PDChina) and found this observation from them interesting:
'People in China & Japan see the 2 side’s relation hit the worst in 10 years:
The 10th China-Japan Public Opinion Poll'
Unfortunately the implied potential for regional tension is very clear. Of course, to finish where we started, the Chinese yuan is in a completely different place versus the yen as evidenced by the observation via Bloomberg earlier today that:
'China’s yuan rose to a six-month high as the central bank raised its fixing by the most in almost four years after the nation reported a record trade surplus. The People’s Bank of China boosted the currency’s daily reference rate by 0.3 percent to 6.1520 per dollar, the biggest increase since November 2010 and the strongest level in four weeks'
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