Japanese Yen Steady Despite Massive Machine Orders Beat
- Japan’s machine orders blew forecasts to pieces, rising 8% on the month when the markets had looked for a 4.1% gain
- The on-year data were less impressive, but even there the fall was less then expected
- A US Dollar-focused Yen Showed little reaction
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The Japanese Yen market remained focused on the US Dollar Monday and barely registered a strong set of machine order data
July’s orders surged by 8% on the month, according to official figures, very nearly double the 4.1% gain expected. On the year orders fell by 7.5%, a shade better than the 7.8% slide forecast. This volatile data series is used by investors to take a stab at estimating Japanese capital expenditure levels between six and nine months from the data of release.
However, USD/JPY barely moved on the data, remaining near its lows for the year. And even when the US Dollar is not under extreme duress Japanese numbers tend not to trouble the pair much. They are viewed as having little chance of altering the Bank of Japan’s monetary policy. According to BoJ commentary, the current, ultra-loose settings will remain in place until consumer price inflation sustainably nears 2%. It is now at 0.4%.
On its daily chart USD/JPY is at a critical juncture. After long threatening to break below its 2017 low of 108.14 the pair finally did so on Friday, remaining below that level at the close.
With trade ramping up in Asia for the first full, weekday session since that fall, whether or not bulls can now defend that line will be extremely interesting. Below it, the entire rise up from November,2016’s lows will come under increasing threat.
--- 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.