Yen Silent as Markets Wait for Key Rate Decisions Later This Week
The Japanese manufacturing PMI declined to 47.9 from 49.9 in July continuing its descent since June of this year when conditions fell below the boom-bust level of 50. A reading below 50 indicates deteriorating conditions.
The jobless rate decreased to 4.3 percent from 4.4 percent in June which is a slight improvement in the overall downward trend which peaked in July 2007. Moreover, the jobs-to-applicants ratio, which measures the number of jobs available for every 100 applicants, increased marginally to 82 jobs per 100 applicants, up from 81 the prior month.
The Japanese Yen was silent as markets are likely to remain calm leading up to the FOMC and ECB rate decision later this week. Demand for Yen is largely driven by risk-aversion trends as investors tend to lean towards a greater propensity to seek safety in highly liquid assets, like the Yen, during times of increased volatility. According to Credit Suisse data, investor expectations appear to be firmly entrenched at an 82.5 percent probability for a 25 basis point rate cut by the ECB. Failure to meet such expectations may prove to be a market moving catalyst.
USD/JPY, 15 Minute Chart
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.