Japanese yen daily update for 6th October 2017


The yen has been fairly weak this morning, as Asian investors sell the currency on rising optimism that Trump's tax reforms can become reality. The yen has also sold off following strong US economic data this week, including PMIs, trade balance figures and factory orders that all came in above expectations. Today, markets will be closely watching non-farm payroll data. Earlier in the week, the yen weakened on the Bank of Japan's tankan survey that showed manufacturing growth at its highest levels in a decade. As positive data out of Japan typically boosts risk sentiment (causing Japanese investors to park their funds offshore), the yen fell on the news. 

USD/JPY is currently trading just above 113. EUR/JPY is trading flat this morning, have weakened yesterday. The pair is currently trading above 132.0. 

Looking at economic data this week, on Monday the BoJ's tankan's survey painted a rosy picture of manufacturing expectations (big manufacturers outlook of 19 vs. 16 expected). On Tuesday, consumer confidence figures came in above the last reading (43.9 vs. 43.3 previous).  On Thursday, data showed that Japanese investors were selling foreign bonds while buying foreign stocks. Finally, today's foreign reserve data showed falling foreign reserves, while leading indicators were stronger than the prior figures.