Trade Desk Thoughts - Japanese Preliminary Industrial Production

Japanese Preliminary Industrial Production Actual -3.5%, Expected -2.9%, Previous 1.3%

Release Explanation: This report is a preliminary leading indicator of an economy’s health. Industrial production measures the volume of items produced in Japan’s mining and manufacturing industries and tends to react quickly to the ups and downs in the business cycle. For these reasons industrial production is considered a reliable leading indicator that conveys information about the overall health of the Japanese economy.

Trade Desk Thoughts: Industrial production for August decreased 3.5 percent. Production, Shipments and inventory all decreased while the inventory ratio increased, although, production is expected to increase in September by 1.6 percent, but then decrease once again in October by 0.1 percent. This is the first time the reading has decreased twice in a row. Since last year, industrial production has slipped 6.9 percent. Sectors that contributed to the decrease were generally transport equipment, general machinery, and electrical machinery.

Forex Technical Reaction: The yen increased slightly from the reports that have been released this evening. The pair is still quite a ways from the neutral LFB pivot at 104.95.

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