- USD/JPY little-changed as Tankan data puts manufacturers’ sentiment at weakest since 2013
- Tepid response likely reflects data’s limited implications for BOJ policy, indecisive sentiment
- Risk appetite trends likely waiting for FOMC rate decision for directional bias on Yen prices
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The Japanese Yen was little-changed against the US Dollar as the Bank of Japan’s Tankan report crossed the wires. The survey showed that large manufacturers’ outlook unexpectedly fell to the lowest level since March of 2013. Economists were expecting an improvement ahead of the release.
The Yen’s tepid response to the release likely reflects its limited implications for BOJ monetary policy and risk sentiment trends’ preoccupation with the FOMC rate decision due later in the week. A widely expected interest rate hike may trigger risk aversion across the financial markets, boosting the safety-linked Japanese currency.