Plenty of Japanese consumer data is expected for today’s session with traders already digesting the news of a newly elected prime minister.  Although there will be three key reports from the land of the rising sun, it will be both retail sales and household spending figures that will capture the market’s attention.

In July, both reports are anticipated to show further economic recovery following the country’s natural disaster earlier this year.  Household spending is estimated to decline by 2.9%, following a -4.2% change in June.  Now, although the figure remains negative, it is a vast improvement in the monthly change from the 8.5% slide back in March.  Retail sales are anticipated to show even better results – with expectations of a 1.1% rise in consumer sales.  Not only is this the second month in a row that the market will be seeing positive results, it’s also the second straight month of growth at 1% or more.  This hasn’t happened since the third quarter of last year.  A good sign for the Japanese economy.

Both gauges can be expected to add to Japanese yen strength in the short term, if they remain positive.

Outside of Japan, Australian building approvals is also slated for the session’s schedule.  This is a key sector for the economy as recent declines in home demand have really made it difficult for consumers to spend in the country.  If expectations are met, approvals to break new ground will have increased by 2% in July, rising over the -3.5% change in June.  The positive figure would also lift up the annualized result to a -12.4% compared to last month’s yearly drop of almost 16%.

A higher than anticipated recovery in the Australian building sector could fuel further advances in the AUDUSD currency pair.  The exchange rate has vaulted higher after testing support just above the 1.0600 level after ignoring new home sales data released last night.

Source:  FXAlliance Charting Tool

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