- The Bank of Japan
Benefitting from its safe-haven status, the Japanese Yen has been appreciating against the U.S. Dollar since the beginning of the week, as manufacturing data from Japan came stronger-than-expected, while central bank refused from adding more stimulus. It seems that without strong bullish impetus the pair will not be able to climb above 103.76 and the latest pull back to 102.78 looks reasonable.
Earlier this week the central bank decide to stick to the chosen course of adding 60-70 trillion yen annually in an attempt to boost growth and inflation. While analysts are starting to express their concerns Japanese exports will not boom, the latest manufacturing data sounds promising. The Bank of Japan BSI index, which is a leading indicator of economic health, inched higher to 12.5 in the current quarter, from 9.7 three months earlier, beating market's expectations for a 11.3 reading. Any figure above zero indicates net-optimism among the nation's large-scale producers. A stronger-than-expected data means that manufacturers thought current economic conditions were better this time than in the preceding quarter. In addition to that, sales jumped 1% in the 2014, while profits rose 2.4%, suggesting companies may increase wages, and as a result, boosting domestic demand, which can be a key driver for the economy, amid global headwinds and the upcoming April's sales tax hike.
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