Mixed US Producer Price data sends US yields lower as USD/JPY slips but bouts remain on direction

The US September Producer Price index (PPI) has just hit the screens. The annualised rate was forecast to drop to around 1.6%, from a prior run rate of 1.7%. However, the core rate was actually forecast to rise to 2.6%, from 2.4% The report has revealed that producer prices have risen above consensus on both counts. The core rate has risen to 2.8% and the non-core rate has risen to 1.8%. The immediate reaction in the markets has seen the the USD/JPY initially fall back to around 148.80 and that is probably due to the monthly readings coming in below consensus. So, it remains to be seen just how the dollar will settle once the dust settles on all this. The USD/JPY is falling back as US yields slip, but to be honest that does not make a whole load of sense, but we shall see in due course how this plays out. The USD/JPY is just now trading at 148.88