USD/JPY Steady After Disappointing Manufacturing PMI Data
- Yen shows lukewarm response after soft manufacturing PMI data
- Nikkei Mfg PMI 50.2 in February vs. 52 expected, 52.3 in January
- Tepid response hints at limited impact on markets’ BOJ outlook
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The Yen did not display an outsized move against the US Dollar after Japan’s Nikkei Manufacturing PMI data crossed the wires. February’s preliminary statistic showed a print of 50.2, lower than the forecast of 52.0 and the prior reading of 52.3.
The currency’s tepid reaction may be due to traders’ speculation that the news-flow will not significantly alter established expectations of Bank of Japan monetary policy. The central bank recently implemented negative interest rates at its January policy meeting.
On the whole, USD/JPY is trading narrowly higher on the day as a recovery in risk appetite boosts the sentiment-linked currency pair. The correlation between the exchange rate and Japan’s benchmark Nikkei 225 stock index is 0.97 on rolling 20-day studies.
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