Talking Points:
- USD/JPY little changed as Nikkei Manufacturing PMI index shows sector expanded for its 8th month
- New orders grew at a weaker pace than the month prior, but new export orders rose at a faster rate
- Output from manufacturing rose for its 9th straight month, showing a marked increase in production
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The Yen largely overlooked the release of Japanese manufacturing PMI data showing the sector expanded for its eighth consecutive month, and at a faster pace. The headline index rose to 52.8 in April from 52.4 in March.
The Manufacturing Output index rose to 53.6 in April from 53 in March, which was cited as a “marked increase in production”. Total new orders increased but at a slower pace than the month prior. New export order growth accelerated however.
The currency was on the way higher against the US Dollar ahead of the release and continued along that path thereafter. USD/JPY fell alongside Nikkei 225 futures, hinting that risk aversion may have driven the move.
The on-coming French presidential election may have unsettled investors. First-round voting is due to take place this weekend. As for the data, it may have been ignored because of its limited impact on BOJ policy bets. Indeed, Governor Kuroda stressed the need to continue powerful easing just yesterday.
USD/JPY vs. Nikkei 225 Futures (5min chart)
