After 5 trading days and 200 pips of losses, USD/JPY is finally staging a rally. However today’s gains are not enough to take the heavy burden off of Japanese exporters. Stock markets responded to potential exporting losses with a more than 2% decline. Despite pressure on stocks, Japanese data posted mild improvements. Industrial Production on a monthly basis was better than the previous month at 2.1%, while annualized production improved to -22.7%. Today’s report showed that inventories are on the decline, and shipments posted a surprising rise. Japan also reported the fifth consecutive rise in Capacity Utilization while that the pace of decline in Condominium Sales has started to slow. The only release on tap for tomorrow will be Machine Tool Orders. Of course this week’s primary concern will be the BoJ’s rate decision which is coming up on Wednesday. Even though the BoJ meeting has become almost a non-event for currency markets, new discussions over asset-purchase exit strategies should warrant some attention. Report from Kathy Lien,FX360.COM
May The Force Be With You.
Eddie Azron