Japanese Yen in Flux on Data and the Chinese Yuan Battles Soft Sentiment


Japanese Yen, USD/JPY, US Dollar, USD/CNY, CNY/JPY, Yuan – Talking Points

  • USD/JPY is looking to higher levels despite mixed economic data
  • Yen weakening might have broader ramifications for the region
  • What’s good for the Yen might be good for the Yuan

Recommended by Daniel McCarthy

Get Your Free JPY Forecast

The Japanese Yen continued to depreciate to start the week after a mixed bag of fundamental data showed strong retail sales but disappointing industrial production figures.

Meanwhile, Chinese PMI came in weaker than anticipated.

Japanese industrial production was -1.6% against -0.8% expected month-on-month for September and 9.8% year-on-year to the end of September, below forecasts of 10.5%.

Month-on-month retail sales in Japan for September showed a 1.1% increase rather than 0.8% anticipated to reveal a 4.5% increase instead of 4.1% forecast.

A potentially significant component of the surge in retail sales could be attributed to the large increase in visitor arrivals to Japan in September.

Preliminary figures from the Japanese government show 206,500 tourist arrivals for that month, compared with 17,766 in January. The month-by-month increases have been fairly linear.

The increases in tourist activity coincides with the relaxing of Covid-19 related restrictions. This easing of requirements for travel to and within Japan stands in stark contrast to those in China.

Recommended by Daniel McCarthy

How to Trade USD/JPY

Official Chinese PMI, a survey of purchasing managers at large Chinese firms, showed a decree of pessimism with a read of 49.2 for October of manufacturing managers against 49.8 anticipated. The non-manufacturing index printed at 48.7 for the same month, a big miss on 50.1 forecast.

Being a diffusion index, 50 is considered neutral on the economic outlook, above 50 is seen as positive and below 50 is seen as negative.

The gloomy perspective may reflect the ongoing headwinds of a zero-case Covid-19 policy

The Chinese earnings season is coming to a close and so far, Chinese companies that have reported, shows around a quarter beat estimates, half missed, and the rest were in line.

China is Japan’s largest trading partner, with around 22% of Japan’s imports and exports going between the second and third largest global economies.

Overall, the Chinese Yuan has been appreciating against the Yen and this will ultimately contribute to Japan’s economic prospects.

The Yen made a 32-year low against the US Dollar at 151.95 earlier this month before the Bank of Japan intervened, selling USD/JPY.

At the same time, The Chinese Yuan has been depreciating against the US Dollar and this works in China’s favour as they run a significant trade surplus with the US.

If USD/JPY runs higher, Chinese officials may allow USD/CNY to move in that direction as well.

USD/JPY/ USD/CNY, USD/CNH, CNY/JPY, CNH/JPY

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter





Source link

Related articles

The USD Slide Continues: EUR & GBP Targets for Might – Analytics & Forecasts – 1 Might 2025

Hello everybody! Let’s replace our forecasts for Might. The broader "risk-on" development remains to be in play, which suggests the USD is more...

KCE: Capital Market Shares Washed Out, Upgrading To Purchase (NYSEARCA:KCE)

This text was written byObserveFreelance Monetary Author | Investments | Markets | Private Finance | RetirementI create written content material utilized in varied codecs together with articles, blogs, emails, and social media for...

When the Fairness Premium Fades, Alpha Shines

For greater than a century, the fairness threat premium (ERP) — the surplus return from shares over bonds or money —...

EnerMech lands pre-commissioning contract for Salamanca FPU in U.S. Gulf

EnerMech has secured a major contract from LLOG Exploration Co. for pre-commissioning providers...

10 habits you want if you wish to earn money doing what you like

There’s a dream that a variety of us share: waking up every day excited to do the work we love and really getting paid for it.  However let’s be sincere, making a dwelling doing...
spot_img

Latest articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

WP2Social Auto Publish Powered By : XYZScripts.com