Japan's primary inflation indicator saw its first slowdown in five months in September. Data released by Japan's Ministry of Internal Affairs on Friday showed that Japan's nationwide core CPI, excluding fresh food, rose 2.4% year-on-year in September, lower than the previous value of 2.8%, but slightly higher than the market expectation of 2.3%; Japan's nationwide CPI rose 2.5% year-on-year in September, lower than the previous value of 3%. The slowdown in this inflation indicator in Japan is largely due to government utility subsidies. Therefore, if there are no other signs indicating a weakening trend in inflation, this may have a limited impact on the Bank of Japan's path policy. At the same time, the inflation indicator excluding energy costs and fresh food prices rose 2.1% year-on-year, higher than the previous value of 2.0%; the service prices, which the Bank of Japan considers a key indicator for testing price trends, rose 1.3% year-on-year in September, lower than the previous value of 1.4%. Bank of Japan member Adachi Seiji said on Thursday that during the gradual process of raising interest rates, it is necessary to be careful to raise interest rates as slowly as possible while maintaining a loose financial environment until the trend reaches 2%. Adachi Seiji emphasized the need to take a gradual approach to raising the benchmark interest rate, and his remarks may consolidate the market's view that the Bank of Japan will remain on hold when it meets to formulate policy this month.
Additionally, data released by the U.S. Department of Labor on Thursday showed that the number of people continuing to claim unemployment benefits rose to 1.87 million last week, the highest level since July last year. In the past period, hurricanes "Helene" and "Milton" hit the southeastern United States, causing destruction that prevented many people from working and may also prevent them from applying for benefits. This means that the number of initial jobless claims will continue to fluctuate in the short term, but economists expect this fluctuation to eventually subside. Prior to this, the weekly initial jobless claims were very low, partly because the number of unemployed people in the United States was relatively low. Another reason for the decline in the number of first-time applications was a significant drop in applications in Michigan on an unadjusted basis. This is the largest decline since February 2022, after a significant increase in the previous two weeks due to layoffs in the manufacturing industry. The four-week moving average of new applicants rose to 236,250, the highest since August last year.
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Today's data to watch include the UK's seasonally adjusted retail sales month-on-month rate in September, the United States' total annualized building permits in September, and the United States' total annualized new housing starts in September.
Gold/USD
Gold fluctuated and rose yesterday, hitting the 2700 mark and setting a new historical high, with the current exchange rate trading near 2712. In addition to the continuous support from the Fed's interest rate cut expectations for gold, the market's risk-aversion sentiment, which has increased due to tensions in the Middle East, is also an important factor supporting the rise of safe-haven gold. Furthermore, the European Central Bank's interest rate cut as expected during the period, along with expectations for further cuts, also provided some support for gold. Today, pay attention to the pressure near 2730, with support near 2700.
USD/JPY
The USD/JPY fluctuated and rose yesterday, with a small daily gain, and the current exchange rate is trading near 149.80. In addition to the strong support for the exchange rate from the US Dollar Index, which refreshed an 11-week high under the support of multiple favorable factors, the weak economic data from Japan during the period also provided some support for the exchange rate. In addition, the cooling expectations for the Bank of Japan's interest rate hike also provided some support for the exchange rate. Today, pay attention to the pressure near 151.00, with support near 149.00.
USD/CAD
The USD/CAD fluctuated and rose yesterday, with a small daily gain, and the current exchange rate is trading near 1.3800. In addition to the support for the exchange rate from short covering, the US Dollar Index also rose, supported by favorable factors such as the cooling expectations for further substantial interest rate cuts by the Fed and the European Central Bank's interest rate cut as expected. Additionally, expectations for a rate cut by the Bank of Canada also provided some support for the exchange rate. Today, pay attention to the pressure near 1.3900, with support near 1.3700.
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