Japanese Yen Steady On Small Leading-Indicator Beat

Talking Points:

• Japan’s economy is doing well currently but the future is clouded
• That was the message from its official indicator release
• The Yen didn’t move much, probably because that prognosis has been quite clear from other recent data

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The Japanese Yen continued to inch lower against the US Dollar Wednesday after some economic data which painted a rosy picture of current conditions but offered a less optimistic take on the future

The official coincident index came in at 117.7 for April. That was its highest since 2008 and a little above the 117.5 expected. For its part, the leading index managed to beat forecasts, coming in at 104.5 rather than the 104.3 which forecasters anticipated. However, it still slipped from the 105.7 seen in March.

The leading index aims to giving an early steer on upcoming economic activity. It aggregates sub-indexes which measure such forward-looking items as inventory ratios and order books. The coincident is similar but, as the name suggests, it offers a look at how things stand now. It aggregates eleven leading indicators, a similar number of coincident indicators and six lagging indicators.

The US Dollar had been inching back through the Asia Pacific session from the lows seen in the US on Monday. The index data didn’t obviously hinder this process but they didn’t help it much either, judging by the price action after their release. They chime with a generally reported market view that economic conditions are improving in Japan but that global uncertainties cloud prospects for future activity.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX

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