Daily Digest Market Movers: Japanese Yen struggles for a firm near-term direction amid mixed fundamental cues
- The Bank of Japan struck a dovish tone at the end of the March meeting and stopped short of offering any guidance about future policy steps or the pace of policy normalization, which, in turn, is seen weighing on the Japanese Yen.
- An official survey showed that China's manufacturing activity expanded for the first time in six months in March, providing an additional boost to investors' confidence and contributing to the offered tone surrounding the safe-haven JPY.
- The National Bureau of Statistics reported on Sunday that China's Manufacturing PMI rose to 50.8 from 49.1 in February, while the gauge for the services sector climbed to 53, suggesting that the world’s second-largest economy is stabilizing.
- The BoJ's Tankan survey revealed on Monday that business optimism among large manufacturers eased to 11 during the first quarter from 12 in the last survey, while the index for large nonmanufacturers rose to 34 from the 30 previous.
- The au Jibun Bank Japan Manufacturing PMI contracted for the 10th consecutive month and was finalized at 48.2 in March, marking the highest level since November and indicating that the worst of the weakness had passed.
- Japan's Finance Minister Shunichi Suzuki said on Monday there were speculative moves behind the recent JPY fall, suggesting that authorities remained ready to intervene in the market to address any excessive falls in the domestic currency.
- Japanese monetary authorities reportedly made a last-minute decision to bring forward an emergency meeting to Wednesday, which was originally scheduled for Thursday, to maximise the impact of arresting sharp JPY decline.
- The US Bureau of Economic Analysis reported on Friday that the Personal Consumption Expenditures (PCE) Price Index rose 0.3% in February, slightly lower than the 0.4% estimated, while the yearly rate edged up to 2.5% from the 2.4%.
- The core PCE Price Index, which excludes volatile food and energy prices, rose 2.8% on a yearly basis as compared to January's upwardly revised reading of 2.9%, keeping a June interest rate cut from the Federal Reserve on the table.
- This, in turn, drags the US Dollar away from its highest level since February 16 touched last week and might further hold back traders from positioning for any meaningful near-term appreciating move for the USD/JPY pair.
- Traders now look forward to important US macro data scheduled for release at the start of a new month, starting with the ISM Manufacturing PMI on Monday for some impetus ahead of the key monthly jobs report on Friday.
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