Forex - Japanese yen weaker after surprise March machinery orders jump
Published May 18, 2014 07:57PM ET
Yen weaker despite better core machinery orders for March
Investing.com - The Japanese yen weakened in early Asia on Monday despite a surge in March core machinery orders likely prompted by brisk business ahead of a sales tax hike that took effect April 1.
USD/JPY traded at 101.55, up 0.02%, after orders jumped 19.1% month-on-month, compared to expectations of a 6.0% gain. It was the first rise in two months.
The US Dollar Index, which measures the greenback against a baske of six major currencies held at 80.09, down 0.04%.
Japan hiked its sales tax to 8% from 5% on April 1 - adn several indicators and company earnings have shown a jump in business before the move - with markets now largely expecting a decline in second quarter activity as a result.
Last week, the dollar ended Friday’s session slightly lower against the yen as a weaker-than-expected reading on U.S. consumer sentiment offset a report showing that U.S. home construction rose strongly in April.
The Commerce Department reported that U.S. housing starts rose 13.2% last month, after a 2.0% increase in March. It was the largest increase in five months, indicating that the economy is shaking off the effect of a weather related slowdown over the winter.
The upbeat housing data was overshadowed by a report showing that consumer confidence in the U.S. deteriorated this month. The University of Michigan's consumer sentiment index dropped to 81.8, from 84.1 the month before. Analysts had expected a slight uptick to 84.5.
In the week ahead, investors will be looking to the minutes from the Federal Reserve's latest monetary policy meeting, due for release on Wednesday, for insight on the central bank's view of the economy.
The euro zone is to publish what will be closely watched data on private sector activity, while the U.K. is to release data on consumer prices.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
On Monday, Germany’s Bundesbank President Jens Weidmann is to speak at an event in Frankfurt; his comment will be closely watched. Later in the day the German central bank is to publish its monthly report.
Markets in Canada are to remain closed for a national holiday.
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Written By: Investing.com
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