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Japanese Yen Attempts to Hold Ground After PMI Releases, Concerns About US-China Trade Deal

June 23, 2020 at 16:46 by Vladimir Vyun

Stacks of the Japanese yen coinsThe main theme for today was the release of PMI reports for various parts of the world, though the topic of the US-China trade deal was also in the news. Overall, markets were in a positive mood, favoring high-beta currencies. Surprisingly, that did not result in a total sell-off of the Japanese currency. The yen fared rather well, holding its ground against most of its rivals and even gaining on some of them.

Markets were spooked at the start of the trading session by comments from Peter Navarro, White House Trade Advisor, who said that the trade deal between the United States and China is “over”. But he quickly backtracked his statement afterwards, claiming that his comments were taken out of context:

They had nothing at all to do with the phase one trade deal, which continues in place.

US President Donald Trump also said that the phase-one trade deal remains in place, tweeting:

As for economic data from Japan, it was mixed. The flash headline au Jibun Bank Japan Manufacturing Purchasing Managers’ Index fell to 37.8 in June from 38.4 in May instead of rising to 39.5 as analysts had predicted. The reading for the au Jibun Bank Flash Japan Services Business Activity Index jumped to 42.3 from 26.5. The Bank of Japan reported that the core Consumer Price Index was unchanged in May. Market participants were expecting the same 0.1% decline as in April.

USD/JPY fell from 106.90 to 106.45 as of 16:45 GMT today. EUR/JPY was little changed at 120.47 after opening at 120.37. GBP/JPY was about flat at 133.23.

If you have any questions, comments, or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.