Japan: Disappointing flat July industrial production report - BBH

Research Team at BBH, notes that the Japan disappointed today with a flat July industrial production report. 

Key Quotes

“The market had looked for around a 0.8% gain.  Industrial output is down 3.8% year-over-year.  The problem is the domestic demand has been soft as have exports.   Many see such soft data as putting more pressure on the BOJ to ease monetary policy further when it meets later this month.  

The Nikkei gapped higher today.  It finished a little below 16900.  The 17000 capped it July and August.   While the technicals look constructive, the key may be the yen.  The JPY103.50 area is the next immediate target.  It is a 50% retracement of the dollar's losses since the July high.  Above there the JPY104.00 area beckons.”