USDJPY Little Changed After US August Business Inventories And Sales Rise
THE TAKEAWAY: US business inventories rose more than expected in August, while sales remain strong > Companies likely to place more orders to replenish stock > USDJPY little changed
U.S. business inventories rose in August for the eleventh straight month, while recent strength in sales signals rising confidence in the U.S. economy. The Commerce Department reported that stockpiles rose by 0.6 percent in August, following a 0.8 percent gain the prior month. The median forecast of economists surveyed by Bloomberg News had projected a 0.5 percent increase in inventories. Meanwhile, sales climbed 0.5 percent after advancing 0.9 percent the month before.
Inventories are a key factor in calculating gross domestic product changes. The rise in stockpiles will help boost growth, and suggests that companies are anticipating a rise in sales in coming months. As strong gains in retail sales over the last two months have made it more difficult for warehouses to remain well stocked, the need to replenish depleted supplies is likely to give the manufacturing sector a much-needed boost in the coming months.
Despite stronger sales and inventories growth, businesses are likely to remain cautious amid concerns about upcoming fiscal policy changes and the slowdown in global economies, which continue to provide a weak environment for business spending.
USDJPY 1-minute Chart: October 15, 2012
Chart created using Market Scope – Prepared by Tzu-Wen Chen
The U.S. dollar remained little changed against the Japanese yen following the release of the business inventories report. At the time this report was written, the USDJPY pair was trading close to pre-release levels at 78.74 yen.
--- Written by Tzu-Wen Chen, DailyFX Research
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