USD/JPY Rises Above 144.00 After Mixed US Flash PMI
The USD/JPY pair moved higher above 144.00 in Monday’s North American session following the release of the mixed preliminary United States (US) S&P Global Purchasing Managers’ Index (PMI) data for September.
The report revealed that the Composite PMI expanded at a slower pace, decreasing to 54.4 from 54.6 in August. A sharp contraction in activities in the manufacturing sector was balanced by better-than-projected service sector performance. Notably, the Manufacturing PMI unexpectedly declined to 47.0, whereas it was expected to improve to 48.5 from the previous figure of 47.9. Conversely, the Services PMI, which measures activities in the services sector accounting for two-thirds of the US economy, rose to 55.4 from an estimate of 55.2 but remained lower than the prior reading of 55.7.
The mixed flash US PMI report has prompted some recovery in the US Dollar (USD), with the US Dollar Index (DXY) gathering strength to decisively break above 101.00. Looking ahead, the US Dollar’s direction will be influenced by market expectations regarding the Federal Reserve’s (Fed) interest rate outlook.
Investors are closely monitoring the asset’s movement as they await the Bank of Japan (BoJ) Governor Kazuo Ueda’s speech on Tuesday, in which he is expected to provide fresh guidance on the interest rate outlook.
Last week, comments from Kazuo Ueda during a press conference following the monetary policy decision indicated that the BoJ is in no rush to hike interest rates further. BoJ Governor Kazuo Ueda stated, “Our decision on monetary policy will depend on economic, price, and financial developments at the time. Japan’s real interest rates remain extremely low. If our economic and price forecasts are achieved, we will raise interest rates and adjust the degree of monetary support accordingly,” during the press conference.
As the market awaits further announcements and guidance from both the Federal Reserve and the Bank of Japan, the USD/JPY pair will continue to be influenced by economic data releases and central bank communications.
