'Haven' Japanese Yen Gains Halted By Solid Service PMI
- Japan’s service sector stormed ahead in June, with its best showing for 22 months
- The data arrived amid weakened risk appetite as tensions over North Korea rose
- However the numbers saw the Yen’s strong haven bid weaken a little.
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The Japanese Yen lost a little of the ground it had made on the US Dollar Wednesday following the release of more solid data out of the world’s third-largest economy.
Japan’s service sector Purchasing Managers Index came in at 53.3, above its previous 53.0. The “Composite” PMI, which aggregates both the service release and the manufacturing number already in the market, came in at 52.0. This was well below the previous 53.4 but still nicely within the expansion territory which, for PMI surveys everywhere, comes in at 50.
PMI compiler Markit said that job creation in Japan’s service sector was at a four-year high, with output growth overall at a 22-month peak
USD/JPY ticked back above the 113.00 line after the data, in keeping with the thesis that solid Japanese data speaks to more solid global growth, rather than just being a “Japan-only” story. The Yen had been receiving plentiful haven bids through the Asian morning as tensions over North Korea ratcheted up. The US reportedly said it would conduct precision firing drills with its South Korean allies in response to the latest North Korean missile test, which the United Nations Security Council will meet later to discuss.
Asian trade is likely thin thanks to the lack of US leads given the July 4 holiday.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX