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Forex pairs in this Article » USD/JPY (London) - Overnight, Asia markets struggled after slightly disappointing Chinese data. The Hang Seng dropped slightly, down 0.13 percent. Shanghai fell 0.35 percent.

Chinese manufacturing PMI fell below consensus expectations. The official reading printed at 51.0, down from 51.4 and below the consensus expectation of 51.2. The HSBC/Markit final reading also declined, down to 50.5 from 50.8 in line with expectations. The decline was almost across the board, with only input prices showing any upturn.

The Chinese data followed Korean PMI numbers, which rose to 50.8, from 50.4 in November. But despite the seven-month high, the numbers showed a decline in new export orders. The Kospi is down 2.25 percent which, along with Thailand, down 2.53 percent on continuing protests, was the biggest loser of the Asian session on thin trading.

USD/JPY held flat overnight, continuing to hold onto highs above JPY105, fuelled by diverging monetary policy expectations between the Fed and the Bank of Japan. The former is expected to carry on tapering after the first cut of USD10bn on 18 December, leaving the Fed’s monthly asset purchase programme at USD75bn a month. By contrast, the BoJ remains committed to aggressive bond purchases as it chases a 2 percent inflation target. USD/JPY is flat at JPY105.3550.

The Aussie dollar held up after AIG PMI data showed that Australian manufacturing fell from 47.7 to 47.6 – stabilising after a sharp drop in October from 53.2. More positive was the RPData/Rismark House Price Index which showed a 1.4 percent month-on-month gain in home prices, the seventh straight monthly gain, leaving prices up 9.8 percent on the year. AUD/USD is flat at USD0.8891.
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