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COZfx: Yen stronger after better-than-expected Tankan data

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COZfx: Yen stronger after better-than-expected Tankan data

Postby dwang » Tue Dec 17, 2013 2:22 am

COZforex: The Japanese yen rebounded against the dollar on Monday after a survey by the Bank of Japan showed major manufacturers are their most upbeat in six years.

USD/JPY traded at 103.16, down 0.05, after the BoJ Tankan survey that showed sentiment among large-manufacturers rise to +16 in the 3 months to December from +12 in the previous poll announced in September. That's the highest since +19 in December 2007, and compared with +15 forecast. The JPY initially weakened after the data.

Last week, the dollar hit its strongest level in 5 years against the yen on Friday and rise against the euro during expectations the Federal Reserve could begin scaling back its monthly bond buying program as soon as this month.

An agreement on a 2 years US budget deal was also seen as removing an obstacle to the winding back of monetary stimulus.

The dollar pulled back from highs as investors locked in profits, while data showing that US producer price inflation dropped 0.1% in November sparked concerns over the sluggish inflation outlook.

The soft inflation data did little to alter expectations that the Fed will begin withdrawing stimulus in the next few months after the latest US nonfarm payrolls report showed that the US economy added more jobs than expected in November.

In the week ahead, investors will be focusing on Wednesday’s outcome of the Fed’s monthly policy meeting, and a press conference with Chairman Ben Bernanke will be closely watched.

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