Japan and China push back against rising greenback

<p>Kia ora,</p><p>Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news both China and Japan are making background moves to raise the value of their currencies after long weak periods.</p><p>But first, <a href="https://www.newyorkfed.org/newsevents/news/research/2023/20230911" target="_blank"><strong>American inflation expectations</strong></a> for the year ahead were little-changed at 3.6% in August from 3.5% in July, but it was the first increase in five months. Expectations for rents rose to 3.1%, the highest since July 2022. Also, price pressures were seen for petrol, food, medical care, and education but these were all also very minor. Three-year ahead inflation expectations slipped slightly to 2.8%.</p><p>Across the Pacific, <a href="https://www.jmtba.or.jp/wp-content/uploads/sokuhou2308gklfvj.pdf" target="_blank"><strong>Japanese machine tool orders</strong></a> inched ahead in August from July, an improvement. Orders from local customers fell less and export orders rose. But they still haven't gotten back to year-on-year gains yet.</p><p>Meanwhile, <a href="https://asia.nikkei.com/Economy/Bank-of-Japan/Yen-yields-rise-after-BOJ-s-Ueda-hints-at-end-to-negative-rates" target="_blank"><strong>Japanese bond yields rose</strong></a> to their highest since 2014 as remarks by the head of their central bank suggest they want to push back against the very low value of the Yen.</p><p>China's central bank moved to raise the value of the yuan on Friday, and held its higher fixing yesterday.</p><p><a href="http://www.caam.org.cn/tjsj" target="_blank"><strong>New vehicle sales</strong></a> in China in August were strong at almost 2.6 mln in the month, and this level is near the highs for the month over the past ten years. And it is somewhat unusual that these peaks are occurring in August - usually the peak of the year for them is in November.