In a similar reaction of what has happened after the release of June Japanese CPI, USDJPY has got back down after the release of July CPI figure which rose by the fastest pace since 2008 by 0.7% y/y while it was expected to be by 0.6% from 0.4% in June which was the first positive rate since April 2012 showing positive results of BOJ abenomics and no need of further cheap liquidity injection into the Japanese economy for fighting deflation while this figure can open the door for more talking about imposing higher sales taxes after it looked getting cooled recently.

The release of Q2 GDP of Japan could contain the current market sentiment to encourage the traders to wait for a bottom again of USDJPY to restart buying it. USDJPY has broken its previous resistance at 96.95 easily by the Japanese session. After inability of the Japanese yen to press on the greenback to get down below 96 several times recently.

The Japanese economy has grown by 2.6%y/y and 0.6% q/q while the market was waiting for 3.6% yearly and 0.9% quarterly after cheeriness followed the figures of the first quarter which came previously with growing by 3.8% yearly and 1% quarterly to calm down the pace of the Japanese yen depreciation but now after Q2 figures the door is opened for more stimulating measures by BOJ monetary base and also by the Japanese government which can put aside the recent emerging efforts of sustaining its financial stance by imposing higher sales taxes as that can tackle the consuming pace and increase the worries about the pace of recovery in Japan persisting the deflation which it is fighting with BOJ and By God’s will, waiting for the governmental officials’ comments can forward more guiding references of doing what’s ever possible to get rid of this stance which can cause troubles again to the Japanese yen. 

The gold breaking above 1300$ with the beginning of this week by this characteristic suggesting that the way done could be over at this time and there can be a way for getting back to 1348$ before 1396$ again after forming a bottom at 1180$ and a higher bottom at 1207$ to creep again stepping on 1267$ which could hold last week after failure to get over 1300$ making another higher low before succeeding to get over it by this way.

The Gold has been supported in its way to have a place above 1300$ again by the space of correction which has been given to it following Bernanke’s comments about holding the Fed’s QE as long as it can which has been followed by this testimony last week which has shown that the Fed’s is not precommiting about the QE as it looks and it is to wait for the economic data to come to move forward making the market participants to respeculate the time of the QE ending as it has become harder to be with the middle of 2014 as it had been priced before on the recent Fed’s meeting overcome on last 19th of June.

The worries about the Chinese credit market could add to the equities markets woes and the tendency for buying the greenback as a safe haven. These worries have been increased substantially containing the market sentiment since last week with report came out of Fitch suggesting that there are accumulating risks looming the markets around the Chinese banking sector lack of transparency about that issue from the Chinese governmental side.

While the markets are waiting anxiously for interventions to come by God's will from PBOC which did not denied the risks but is still trying to calm the markets down by referring to spurring the growth at these circumstances while the inflation upside risks are still easing as we have watched Chinese CPI getting down previously to 2.1% in May from 2.4% in April while it has been foreseen to be up by 2.4%.