The Japanese yen advanced as a set of good macroeconomic report was released from Japan today, suggesting that policy makers do not need to implement additional monetary stimulus and may even consider an exit from the current excessively accommodative policy.
The headline seasonally adjusted Markit/JMMA Japan Manufacturing Purchasing Managersâ Index advanced from 55.2 in December to 56.6 in January. The report said:
This was the highest reading posted by the PMI since February 2006, signalling a sharp improvement in operating conditions in the Japanese manufacturing sector.
The core Consumer Price Index for Japan rose 1.3 percent on an annual basis in December after rising 1.2 percent in November. The unemployment rate fell by 0.3 percentage point to 3.7 percent last month, more than was expected by specialists (to 3.9 percent).
The favorable data suggests that Abenomics are working and there is no need to stimulate the economy even more.
USD/JPY was down from 102.70 to 102.41 as of 4:33 GMT today after rising to the daily maximum of 102.92 earlier. EUR/JPY dropped from 139.18 to 138.72 and GBP/JPY edged down from 169.30 to 168.66.
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