USDJPY is in the “red”; the pair is slowly growing due to weak numbers from Japan.
The Japanese Yen is retreating against the USD on Tuesday, as macroeconomic reports from Japan were frustrating again. The current quote for the instrument is 108.81.
On Tuesday, Japan published the preliminary report on the Machine Tool Orders for June, which plummeted by 38.0% y/y, even worse than the May reading of -27.3% y/y. This sector is very important for the country’s economy, because it is the basis of the Japanese Export. The indicator growth gives a boost to production and the GDP and vice versa. There are two versions, preliminary and final, with the former being more important
The Average Cash Earnings in Japan lost 0.2% y/y in May after dropping by 0.3% y/y the month before. This another unpleasant signal: employers do not compete for employees and try to strengthen their positions by means of wage indexation, because they realize that the economic outlook isn’t too optimistic and they can’t count on addition of a lot of new orders and funds.
So far, the Japanese numbers are looking very weak, providing the Bank of Japan with a lot of reasons to extend the QE program. And that’s bad news for the Yen.