Japan's Leading Index Touches Record High; Yen Unmoved
Japan’s Leading Index for the month of July released this morning came in at 106.0 marginally beating expectations of 105.9, which marked a record high for the survey, and was accompanied by an upward revision to June’s figures. It was a similar story for the Coincident Index, also released this morning, which came in at 109.0 beating expectations of 108.8 and was also accompanied by a decent upward revision to its June showing. The upward revision in June’s numbers for the Coincident Index – to 109.3 – marked the record high for the survey and July’s 109.0 showing shows a mild decline off those highs but remains at very healthy looking levels. We expect both measures to continue improving and touching fresh record levels in coming months despite the anticipated slowdown in global growth.
The yen was largely unmoved by the release as traders continue to focus on global macro themes for the cues to trade. Many yen traders were still reacting to the Bank of Japan rate decision earlier in the session; many had been expecting further measures from the BoJ to weaken the yen and the market was positioned accordingly. When the BoJ disappointed these expectations and announced no new measures Usd/Jpy took a dive, but found support ahead of 77.00. With the SNB removing some of the safe haven appeal of the franc and the BoJ doing the same for the yen the buck is the last man standing so to speak in the safe haven triangle (USD, CHF, JPY) and we believe it is set to benefit from these developments.
Written by Jonathan Granby, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.