Japanese Yen Struggles to Rise as Market Sentiment Remain Positive

The Japanese yen was attempting to rise today but struggled to do so as the market sentiment was still favoring riskier high-beta currencies. The yen was trading about flat versus most of its rivals, though not all of them.
The Bank of Japan reported that the monetary bases expanded by 18.3% in December after increasing by 16.5% in November. Economists were expecting a slightly smaller increase of 18.0%.
Yesterday, a report showed that the au Jibun Bank Japan Manufacturing Purchasing Managers’ Index rose from 49.0 in November to the neutral level of 50.0 in December according to the final estimate, meaning that the sector stopped its decline at the end of the year. Market participants were expecting the same 49.7 reading as in the preliminary estimate. Usamah Bhatti, Economist at IHS Markit, commented on the result:

Japanese manufacturers signalled a broad stabilisation in operating conditions at the end of a tumultuous year, as the headline PMI registered at the 50.0 no-change threshold in December. This pushed the PMI to the highest level since April 2018 and ended a sequence of 19 straight declines – the longest in the survey history.

Prime Minister Yoshihide Suga announced on Monday that the government is planning to announce a state of emergency in parts of the country because the number of new coronavirus cases did not decline after the New Year. He stated:

The government will begin to consider declaring a state of emergency in Tokyo and its neighboring prefectures. New cases have not declined. On the contrary, they continue to climb which means stronger measures are necessary.

According to today’s reports, the Japanese government panel on coronavirus response advised declaring a state of emergency as soon as possible.
USD/JPY dropped from 103.10 to 102.88 as of 13:14 GMT today. EUR/JPY opened at 126.29, rose to the daily high of 126.55 but has retreated to 126.25 later. NZD/JPY traded at 74.10 after opening at 73.94 and rising to the session maximum of 74.35.
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Original from: www.earnforex.com