The Japanese yen bounced back from its recent lows against the US dollar on Monday, after BoJ reported that the country’s major manufacturers are in the best condition in six years.
The nation’s yen edged 0.38% higher to ¥102.83 at the time of writing, rebounding from last week’s lows as the greenback gained on ‘Fed-tapering’ speculation. The yen dropped to a five-year low of ¥103.92 on Friday
Approximately 34% of analysts forecasted that the US Federal Reserve (Fed) will probably decide to reduce $85 billion in monthly bond purchases at its December 17-18 meeting, while some traders are forecasting the US central bank would begin to taper its bond-buying program by March next year.
The Japanese currency was dragged lower on worries the nation’s economy won’t make it out of the 15-year deflation spiral. Concerns were raised after a worse-than-expected third quarter gross domestic product (GDP) data was reported.
However, on Monday the Bank of Japan (BoJ) released its Tankan survey, revealing upbeat results, as it reported sentiment among large-manufacturers rose to 16 points in the fourth quarter, the highest reading since December 2007 and surpassing forecast of 15. The Japanese currency initially weakened after the survey release.
The outlook for next year’s first quarter came in below forecast, the reading came in at 14 points; rising from 11 points and below the forecasted reading of 17.
The Bank of Japan, which buys more than 7 trillion yen ($68 billion) of the country’s government bonds monthly, will begin its two-day meeting on December 19. The bank’s policymakers are expected to agree with upgrading their near-term assessment of the economy this month based on decent output and consumption data.
The Japanese yen dropped approximately 15.6% versus the greenback over the year measured on a total return basis.
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