• China’s MIIT predicts a 5.7% y/y growth in industrial output for the January to December
• China’s industrial profits decline four straight months, but at a slower rate
• Japan finance minister Kato – alarmed by FX moves, driven by speculators
• South Korea says it has a North Korean soldier in custody
• China November Industrial profit Year to Date (YTD) -4.7% y/y (prior -4.3%)
• PBOC sets USD/ CNY reference rate for today at 7.1893 (vs. estimate at 7.2981)
• Japan inflation data and BoJ December summary raise expectations of a January rate hike
• BoJ December 2024 Summary of Opinions – ‚Gradual increase in CPI‘
• Japan Retail sales for November: +2.8% y/y (expected +1.6%)
• Japan Industrial Production for November (preliminary): -2.3% m/m (expected -3.4%)
• Japan data: October Unemployment rate 2.5% (expected 2.5%)
• Tokyo area December inflation data: Headline 3.0% y/y (expected 2.9%)
• Catch up – OPEC+ does not have „the bandwidth to prop prices much higher“
• Catch up – World Bank raised its 2024 China growth forecast to 4.9%, from 4.8% previously
• Catch up – Further supportive measures in store for China housing sector in 2025
• Catch up – China revises up 2023 GDP by 2.7% from previous estimate
• Trade ideas thread Friday, 27 December, 2024, insightful charts, technical analysis, ideas

In
US time on Thursday USD/JPY traded to circa 158.09,
its
highest
since mid-July this
year. The pair pulled back toward 157.50 during the session here,
responding to:

• December
  inflation
  in Tokyo accelerated for a second month, the government temporarily
  phased out utility subsidies;
• the
  ‘Summary of opinions’ from the Bank of Japan December meeting
  (when the bank maintained its policy rate at 0.25%) showed the policy
  board members remaining optimistic in its assessment that the
  economy and inflation are moving in line with its projections –
  amidst caveats of course – supporting market expectations for a
  near-term rate hike, perhaps as soon as the January 23-24, 2025 meeting.

JPY
crosses slid also. EUR/JPY’s slide was cushioned somewhat by a
drift down a few points for EUR/USD. There were no fresh notable news items for the euro.

From
China
today
we had data showing that industrial
profits extended
their
decline to a fourth straight month, dropping 7.3%. The
flip side, if you prefer a brighter take, is that the fall was slower than the
10% drop in October. The YTD figure worsened, to -4.7% in
January-November from -4.3% in the January-October period.

Regional equities rose, following a lead from higher Wall Street.

This article was written by Eamonn Sheridan at www.forexlive.com.