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Talking Points:

  • The Japanese Yen didn’t move far Monday despite some upbeat data
  • The country’s manufacturing output scaled four-month peaks this month
  • USD/JPY is showing some signs of exhaustion

Find out what retail traders think about the Japanese Yen right now at the DailyFX Sentiment Page

The Japanese Yen was steady Monday despite a rather upbeat snapshot of its home country’s manufacturing performance.

The sector’s preliminary Purchasing Managers Index from Nikkei came in at 52.6, above August’s 52.2. In the logic of PMIs any reading above 50 signifies expansion for the sphere of activity in question. There were faster increases for new orders, export orders, although manufacturing’s job creation hit a ten-month low. In what perhaps will be a small crumb of encouragement for policy makers keen to stoke pricing power, there were increases seen for both input and output prices, although the latter’s rate of expansion slowed.

IHS Markit compiles the survey for Nikkei and said that this strong end to the third quarter “bodes well” for production in the coming months.

Still, the Yen was unmoved by the data release. Signs of robust performance from the Japanese economy are nothing new this year. However, with the Bank of Japan still very publicly committed to keeping monetary policy ultra-loose until consumer price inflation sustainably hits 2%, there is little chance that any single piece of economic data can much affect the Yen. Investors are also on watch for official confirmation of a snap election in Japan. Media reports for the past week or so have suggested that Prime Minister Shinzo Abe may go to the country following a personal revival in the polls.

Japanese Yen Focused Elsewhere as Manufacturing Hits 4-Month High

Having languished since July the US Dollar has seen a revival of its fortunes against the Japanese Yen as the Northern Hemisphere summer has bowed out. However, it seems to have run out of puff at least for the moment and is currently testing the lower boundaries of its uptrend channel.

Japanese Yen Focused Elsewhere as Manufacturing Hits 4-Month High

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter:@DavidCottleFX