After having gotten off to a strong start, the Nikkei turned lower as China concerns weighed on the region. The index printed a low of 12,808 before recovering strongly towards the end of US trade. The Nikkei got off to a good start today, printing a high of 13,238, as USD/JPY also drifted further north and tested ¥98. With limited data out of Japan until Friday, we feel the Nikkei’s moves in the near term will be based on what USD/JPY does.
The data kicks off with durable goods orders followed by the Case-Shiller home price index, new home sales and consumer confidence. US Treasury Secretary Jack Lew and the Richmond Fed will also be on the wires. Should this data prove to be USD positive, then we could see USD/JPY move higher in unison ahead of Friday’s data dump from Japan.