Market Rumours

Japan core machinery orders, regarded as leading capex indicator, likely fell 4.2% on month in October, according to poll of economists by Dow Jones, Nikkei. Such a result would be worst since 9.3% drop in July. Despite jumping 10.5% in September, orders likely still struggling to regain surer footing as many firms reluctant to pour money into plant and equipment with much excess capacity, uncertainty over final global, domestic demand remaining, analysts say. Also likely to continue dragging on orders ahead is deflation, which increases real interest rates, making firms' capex-related borrowing costs more expensive. Data earlier Wednesday showed weaker than expected July-September capex behind a sharp downward revision to that quarter's GDP, which government now says expanded mere 0.3% on quarter, much lower than preliminary estimate of 1.2% expansion. October machinery orders data due at 2350 GMT.

USD/JPY, EUR/JPY off earlier highs on selling by speculators amid risk-reduction mood, says senior dealer at major Japan bank; sluggish Asian shares, Nikkei last down 1.3%, weighing on sentiment. "Today's currency moves so far are mostly driven by short-term players' position adjustments," dealer says. Adds, Japan exporters also sell USD, EUR. Says "many expect the downside" if share markets continue to stagnate. EUR/JPY support at 129.00 vs last 130.27, from early high of 130.49; USD/JPY support at 87.80 vs 88.42, from early high 88.70