USD/JPY Steady After Disappointing Manufacturing PMI Data
DailyFX.com -
Talking Points:
Yen shows lukewarm response after soft manufacturing PMI data
Nikkei Mfg PMI 50.2 in February vs. 52 expected, 52.3 in January
Tepid response hints at limited impact on markets’ BOJ outlook
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The Yen did not display an outsized move against the US Dollar after Japan’s Nikkei Manufacturing PMI data crossed the wires. February’s preliminary statistic showed a print of 50.2, lower than the forecast of 52.0 and the prior reading of 52.3.
The currency’s tepid reaction may be due to traders’ speculation that the news-flow will not significantly alter established expectations of Bank of Japan monetary policy. The central bank recently implemented negative interest rates at its January policy meeting.
On the whole, USD/JPY is trading narrowly higher on the day as a recovery in risk appetite boosts the sentiment-linked currency pair. The correlation between the exchange rate and Japan’s benchmark Nikkei 225 stock index is 0.97 on rolling 20-day studies.
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