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News
Tuesday, October 13, 2026
What’s happening: The Japanese yen gained versus the US dollar this morning as investors digested the latest economic reports.
What happened: Data released this morning showed producer price inflation easing in September.
Weakness in the US dollar also provided support to the Japanese yen, while investors await some key economic reports later this week.
Why it matters: Japan’s PPI rose 6.8% year-over-year in September, slowing from August’s pace and market estimates of 7.6%. The latest reading signalled the weakest growth in producer prices since May.
PPI declined 0.3% month-over-month, matching the decline in August. The figure came in lower than market estimates of 0.5%.
Cooling crude and commodity prices resulted in lower inflation for September, with a decline in oil prices last month on some improvement in oil flows from the Middle East. Crude prices particularly impact Japan’s inflation as it imports around 97% of its total oil demand.
Despite easing in producer prices in September, Japan’s PPI inflation remained higher than the Bank of Japan’s target, supporting speculations of further interest rate hikes.
The Japanese central bank has raised its benchmark interest rates by a cumulative 50 bps this year amid inflationary concerns.
Other data released this morning showed Japan’s bank lending climbed 5.3% year-over-year in September, in-line with August but coming in below market estimates of 5.5%.
Weakness in the US dollar provided a boost to the Japanese yen. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell more than 0.1% to 102.45 this morning.
The USD/JPY forex pair fell 0.2% to 158.36 this morning.
What to watch: Investors will keep an eye on developments related to the US-Iran conflict.
Data on industrial production, foreign bond investment and machine orders from Japan will be released this week. Analysts expect Japan’s industrial production to decline 1.7% in August, following a 0.2% contraction in the previous month. Japan’s core machine orders, which declined by 3.7% to ¥1,016.9 billion in July, are expected to gain 3% in August.
Context: Equity markets in Europe closed higher, with Germany’s DAX 40 index recording its highest close since October 6.
Details: Defence stocks provided a significant boost to the market rally on Monday, with Rheinmetall leading the DAX 40 index. Shares of defence electronics manufacturer Hensoldt and propulsion systems maker Renk also recorded gains after Morgan Stanley’s optimist sector outlook update.
Infineon was the poorest performer amid overall weakness in semiconductor stocks.
Hopes of Russia returning to the international energy markets provided a boost to market sentiment after US President Donald Trump announced a diesel supply arrangement with the country. Trump also announced that Russia and Ukraine had agreed to halt attacks on energy infrastructure.
Germany’s DAX 40 jumped 0.76% to settle at 25,277.68 on Monday, while the STOXX Europe 600 Index gained 0.65% to close at 635.65. France’s CAC 40 added 0.38% to settle at 7,832.88.
What to watch: Investors will keep an eye on upcoming earnings reports.
Data on Germany’s current account will be released today (1630 UAE Time). Germany’s current account surplus, which widened to €21.2 billion in July from €10.9 billion in the year-ago period, is expected to narrow to €17.2 billion in August.
Data on Germany’s wholesale prices will be released on Wednesday. Analysts expect wholesale prices in Germany to rise 0.7% in September following a 0.9% gain in August.
Other Markets: US trading indices closed mixed on Monday, with the S&P 500 and Nasdaq 100 down by 0.06% and 0.71%, respectively, and the Dow Jones index up by 0.38%.
Ukraine’s President Volodymyr Zelenskyy accused Russia of violating the energy ceasefire by carrying out six strikes on its energy facilities. The news sent the USD/RUB forex pair lower in forex trading this morning.
Australia’s NAB business confidence index declined to -13 in September from the previous month’s reading of -9. Business sentiment falling to its lowest level since May exerted pressure on the AUD/USD forex pair.
UK’s retail sales surged by 1.0% year-over-year in September, accelerating from 0.5% in August. The latest reading topping market estimates of a 0.7% gain sent the GBP/USD pair higher in forex trading this morning.
India’s headline inflation rate climbed to 5.54% in September from 4.83% in the previous month. Inflation surging to the highest level since October 2024 lent support to the USD/INR forex pair.
China’s total vehicle sales dipped 8.4% year-over-year to 2.956 million units in September, versus a 5.1% decline in the previous month, sending the USD/CNY pair higher in forex trading this morning.
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