Japanese Yen Still Pressured Despite Small Business Fillip
- Small business confidence picks up in Japan, according to a closely-watched indicator
- Moreover, the index crossed the line, so that optimists now outnumber pessimists
- The Yen continued to weaken against the US Dollar however, extending the session’s overall theme
The Japanese Yen was steady against a US Dollar which has been broadly higher all session Wednesday as an indicator of local business confidence perked up.
The Small Business Confidence indicator taken by Shoko Chukin bank rose to 50.5 in March. This is not only well above February’s 47.7 print, but it means that the index has crossed the key 50 line. A reading above that means that optimists outnumber pessimists.
USD/JPY ticked up to 111.20 after the release, from 111.13 just before it. However, the greenback has gained sharply since the US close, since when it has risen from the 110.15 area.
Still heading up: USD/JPY
Indeed, the US Dollar spent much of the Asian session bouncing back from Tuesday’s four-month lows. On Tuesday, Federal Reserve vice-chairman Stanley Fischer told broadcaster CNBC that two more interest-rate hikes this year seemed "about right” to him.
This has been Fed’s official position all year, but his comments nevertheless revitalized Dollar bulls who had started to wonder about it. The withdrawal of a key healthcare bill last week had the markets doubting whether the US Administration will be able to get the pro-growth bills investors want to see through Congress, and, by extension, whether many more rate hikes would be needed.
Fisher’s words seem to have reassured them. Some weak Japanese retail data already released this session probably didn’t do USD/JPY any harm either.
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--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.