Yen Rebounds from 5-Year Troughs - 16.12.2013
Japan’s Central Bank released today the Tankan survey showing that manufacturing index increased to a 6-year high standing at 16 for the last quarter of 2013 up from previous quarter at 12 and was higher than expected. The Tankan concerning services also advanced to a 6-year peak surprising market participants.
The latter indicates that Japanese economy is getting stronger due to aggressive fiscal and monetary policy and that may hold off Bank of Japan to add further to asset purchases. Moreover, NIKKEI 225 declined by 1.62% weighed by weaker Chinese PMI and due to uncertainty ahead of FOMC Statement on Thursday. All that lifted the Japanese Yen from 5-year lows against the greenback with the USDJPY falling earlier on Monday to support at 102.63.
USDJPY
Elsewhere, the US dollar is mildly weaker against the Euro after German Manufacturing PMI rising more than forecasted, followed by a stronger than expected Euro zone Manufacturing PMI. However EZ Services PMI was weaker than estimated. The common currency jumped as high as 1.3773 against the US dollar.
The forex market is not moving much as the GBPUSD is consolidating around 1.6320 and the USDCAD has been in 1.0583/1.0575 tight sideways zone ahead of Fed meeting on Thursday. In addition, ECB President Mario Draghi will speak today before the European Parliament. Lastly, US dollar index trades around 80.01 without direction with investors looking at risk of Empire State Manufacturing Index as well as PMI and later on by US Industrial Production.