Japanese Yen yawns after mixed business confidence report
|The Japanese yen is coming off a quiet week and is showing little movement on Monday. In the European session, USD/JPY is trading at 151.38, up 0.03%.
Business confidence among major manufacturers falls
The Bank of Japan’s Tankan business confidence survey was a mix and the yen showed a muted response. Business confidence for major Japanese manufacturers eased to 11 in the first quarter, down from a revised 13 in Q4 2023 but above the market estimate of 10. This was the first decline in four quarters and was attributed to weak activity in the auto sector due to production cuts.
The services sector showed an improvement in business confidence, rising to 34 in the fourth quarter, up from a revised 32 in Q4 2023 and just above the market estimate of 33. The index accelerated for an eighth straight quarter and hit its highest level in over 30 years.
With manufacturing and services both showing optimism, the readings are unlikely to change the BoJ’s policy outlook. The central bank lifted rates out of negative territory in late March but has signaled that it will not rush into another rate hike. BoJ policy makers will want to analyse additional data, especially inflation, as part of upcoming rate decisions.
The BoJ has set a rate target of 0% to 0.1%, so it’s fair to say that the central bank is moving very slowly in its tightening. With the Federal Reserve rate at 5% to 5.25%, the US/Japan rate differential was hardly dented by the BoJ rate hike, which explains why the yen didn’t get a boost after the move and remains at very low levels.
USD/JPY technical
-
USD/JPY is putting pressure on resistance at 151.45. Above, there is resistance at 151.87.
-
There is support at 150.93 and 150.51.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.