Yen declines despite strong Tankan data

Story link: Yen declines despite strong Tankan data

The US dollar held steady against the euro and saw slight gains in relation to the yen and sterling on Monday after the US Institute of Supply Management’s purchasing managers’ index was shown to be off unexpectedly in June. Some analysts said that with low trade volume ahead of the Independence Day holiday in the United States, that reaction to the new data could be delayed.

While the greenback sank to a three-week low versus the euro immediately after the new data was revealed, it had was back to its starting level of $1.2793 against the shared currency by midday. The US currency added 0.3 percent to $1.8415 in relation to sterling, and gained 0.4 percent to ¥ 114.87 in relation to the Japanese yen.

The euro, meanwhile, was stronger as the Eurozone manufacturing purchasing managers’ index was it a six-year high in June at 57.7, up from 57.0 in May. In addition, Eurzone unemployment fell to a four-year low of 7.9 percent in June.

The shared currency added 0.2 percent to SFr1.5673 versus the Swiss franc, while it gained 0.4 percent to £0.6946 in relation to sterling and was up 0.5 percent to a new high of ¥146.93 against the yen.

The weakness in the yen came even though the latest Tankan survey from the Bank of Japan shows that business confidence is up in Japan, a sign that the Bank could end its policy of zero interest rates when it meets later this month.

In addition to its declines in relation to major currencies, the yen dropped 0.4 percent to ¥85.32 versus the Australian dollar and it fell 0.7 percent to Won8.2252 in relation to the South Korean won.