Yen Drops as China’s PMI Comes Out Better than Expected

The Japanese yen retreated today as better-than-expected macroeconomic data from China convinced traders to drop their risk-negative attitude and buy high-beta currencies.
The HSBC Flash China Manufacturing Purchasing Managers’ Index rose from 48.1 in April to 49.7 in May, while analysts forecast just a small increase to 48.4. It was the highest level in five months. The reading still indicated a contraction of the sector but it was very close to the neutral 50.0 level.
USD/JPY was up from 101.36 to 101.55 as of 10:55 GMT today, reaching the high of 101.75 intraday. EUR/JPY ticked up from 138.72 to 138.92, and its daily high was at 139.12.

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