Japanese Yen Ignores PMI Release, Rises on BOJ Bond Purchases
- Japanese PMIs for services and composite saw their fourth and third month of expansion
- USD/JPY largely ignored the solid PMI print but fell nearly 0.5% following JGB operation
- BOJ maintained its JGB purchase rate, possibly undercutting expectations of an increase
The Japanese Yen largely ignored the Purchasing Managers Index (PMI) release for January. However, the USD/JPY fell nearly half a percent 10 minutes after the Nikkei stock index opened. The Yen strengthened alongside Japanese 10 year yields as the BOJ’s bond purchasing operations failed to meet market expectations, according to newswires.
The BOJ purchased 450 billion Yen of 10 year JGBs, the same as previous operations. However, this may have disappointed market expectations for greater purchases in the face of rising borrowing costs.
The Japanese PMI services index fell slightly in January to 51.9 from December’s 52.3. The composite index also fell in January to 52.3 from 52.8 in December. Despite the index falling from the previous month, the service sector saw its fourth straight month of expansion, and composite business activity saw its third month of growth.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.