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Talking Points:

  • Japan’s Manufacturing PMI rose to 52.8 in November vs. 52.4 prior
  • Data reveals fastest pace of factory-sector growth since March 2014
  • Nikkei losses slow, Yen gains lose traction as PMI data crosses wires

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The Yen showed a tepid reaction against the US Dollar after Japan’s preliminary November PMI figurescrossed the wires. The 52.8 reading showed that the country’s manufacturing sector not only grew for a seventh consecutive month, but also registered the fastest pace of expansion since March 2014. A reading above 50 indicates expansion while a reading below 50 shows contraction.

The anti-risk Yen was trending higher as Japan’s benchmark Nikkei 225 stock index declined as shares followed negative cues from Wall Street. News-wires attributed the selloff to weak commodity prices, which may be signaling bets on increasingly sluggish growth across Asia and especially in China, the world’s largest consumer of raw materials.

The upbeat PMI print slowed this dynamic, offering stocks a modest boost and weighing on the Japanese unit. Follow-through proved lackluster however considering the data’s limited implications for near-term BOJ monetary policy expectations. Beating deflation remains the central bank’s primary challenge. With that in mind, investors are likely to look ahead to minutes from the October’s policy meeting and CPI data due later in the week for substantive direction cues.

Japanese Factory-Sector Growth at Fastest Pace Since March 2014

original source
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