THE TAKEAWAY: Japan’s Manufacturing PMI (JAN) came in at 48.5 > PMI level still indicative of manufacturing activity contraction > Yen outlook Bearish
Japan’s Manufacturing Purchasing Manager Index (PMI) for February came in at 48.5 versus the previous month’s level of 47.7. The Yen depreciated following the PMI data release and was down -0.188% versus the dollar as of this report.
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While a slight month to month increase in Japan’s PMI may point to minor economic growth, manufacturing activity still remains in a steady state of contraction. This data release marks the 9th straight month that Japan’s PMI has come in below the contraction/expansion threshold level of 50. Given Japan’s continual economic struggles it will likely take a plethora of positive economic data before Japan’s policymaker’s begin rethinking the aggressive monetary policy tactics that they have planned for 2014. In the meantime forex traders may wish to focus on the general risk sentiment of the currency markets, which has also placed downward pressure on the Yen in recent months.
USD/JPY (6 Hour Chart)
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