The Japanese yen was little changed following a report that showed that economic activity in Japan slowed this month. The services sector barely expanded as its rate of growth slowed sharply compared with September, while the manufacturing sector accelerated the rate of its decline unexpectedly.
The Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index fell to 48.5 in October from 48.9 in September. That is instead of an increase to 49.2 predicted by analysts. A decline below the neutral 50.0 level means that the sector was declining with an accelerating pace. In fact, it was the fastest contraction since June 2016.
The Jibun Bank Flash Services Business Activity Index dropped sharply to 50.3 this month from 52.8 in the previous month.
Joe Hayes, economists at IHS Markit, commented on the result:
Japanâs economy hit a widely-expected bump in October following the consumption tax increase which took effect during the month. However, the impact has been somewhat obscured by the typhoon, which panelists, particularly in the service sector, were disrupted byâ¦. Overall it seems that temporary domestic factors have been the primary cause of reduced output at the start of the fourth quarter, suggesting there is potential for some pay-back in November.
Released yesterday by the Bank of Japan, a report showed that the Consumer Price Index rose 0.3% in September, year-on-year, after increasing by 0.4% in August.
USD/JPY slipped from 108.69 to 108.59 as of 12:21 GMT today. EUR/JPY traded at about 120.85 after opening at 120.97 and rising to the daily high of 121.38. GBP/JPY edged down a bit from 140.62 to 140.05.
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