Asian Indices

Nikkei 16,360.71 -195.24 points (-1.18%)

Shang Hai Composite 3,068.33 -17.55 points (-0.57%)

ASX 200 Australia 5,541.90 -26.40 points (-0.48%)

Terumo Corp is the worst performer in Japan, down 4.93% followed by Toyobo Co down 4.71%. Among the gainer, Nippon Steel & Sumitomo Metal raise 2.04%.

Japan CPI soft despite policies taken

Customer prices fell in July marking a five months consecutive decline. Inflation drop 0.4% MoM, it will put more pressure on Abe’s promises for more aggressive monetary policies.

The chart above shows history of Japan core inflation growth.

There are talks in the market about an expectation of BOJ will take action in September. The talk circulating about BOJ preparing bigger stimulus than incredibly massive stimulus currently enacted.

China PBOC ready to flood the market with more stimulus

PBOC this week introduced 14-day reverse repo which confirms there is a problem in availability of cash in the money market. Today it set to flood the market with 95B yuan ($14.27B) through seven-day bond reverse repo and 50B yuan 14-day reverse repo.

Oil break above short term resistance

A break above current trend line will give oil more room for appreciation, although Wednesday surpluses in oil inventory report were dampening the bullish movement, there is the affirmation from Saudi and OPEC coming into September. Oil might prepare for upside as long as Today Jackson Hole does not produce surprise, no rate hike tone will be good for oil.