Yen on a Downward Road – Factory Fuss & Services Squeeze
Yesterday’s market pulse sent the Japanese yen tumbling. Traders went from zero to downward pressure in a matter of minutes, largely because fresh data painted a bleak picture of Japan’s own economy.
What’s in a PMI?
- Manufacturing1 – PMI fell to 48.3 in March, its lowest in a year. That’s bigger than a Thanksgiving turkey.
- Composite PMI2 – dropped to 48.5, proving the services sector is not thriving either.
With factories grinding down and services slowing, investors got the hint that the yen might not be as shiny as it felt in the past.
Yields and the Bank of Japan (BoJ)
Japanese yields did a little bounce back after the BoJ released its latest comments. The bank hinted it might keep raising rates if inflation targets get a green light. But for the most part, yields have floated within a narrow band for a few days, as everyone’s still waiting on the next economic shock.
Looking Ahead
So, what’s next for the yen and those yields? It’s all down to:
- BoJ policy moves – Change the stance on inflation and watch those rates climb.
- The broader economic scene – A weak economy and stubborn inflation will keep the yen struggling—at least in the short run.
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