The Japanese Yen moved higher against the US Dollar after a surprisingly dismal reading in August’s US manufacturing figures. The US Institute for Supply Management reported that factory activity dipped to 49.4, down 3.2 points, and off the consensus call of a slight decline to 52.0 from July’s 52.4. August’s reading was the first time since February that manufacturing activity has declined in the US. In Asia, recently released PMI manufacturing reports from China and Japan were mixed, with China’s NBS PMI surprising with a rise to 50.4, the Caixin PMI dipping to 50.0 while Japan’s PMI edged lower to 49.5.
As reported at 10:31 am (JST) in Tokyo, the USD/JPY pair was trading at 103.32 Yen, up 0.10%; the pair had recently climbed to 104.00 Yen, a fresh 1-month high. The AUD/USD pair was lower at $0.7549, down 0.03%.
FX Market to Focus on US NFP
Markets’ attention will focus back to the US on Friday with the latest release of labor data for August. FX traders had been expecting that the Federal Reserve would continue to take a hawkish stance, however, the latest PMI data brings back some uncertainty. A beat on the labor data could reinforce sentiment for a rate hike from the US central bank. The Fed is one of the few major central banks to consider a tighter policy, continuing its divergence from the Bank of Japan which maintains an ultra-loose monetary policy.