- The USD/JPY remains steady as the US dollar holds firm on Tuesday, awaiting Powell’s comments.
- The US S&P Global PMI saw a decline in September but still indicates growth.
- Fed’s Goolsbee mentions that significant cuts will be avoided, maintaining a cautious policy approach.
The Japanese Yen (JPY) is experiencing modest pressure against the US dollar (USD) on Tuesday. USD/JPY has recovered slightly from earlier losses, reflecting stable US economic data and the measured tone from the Federal Reserve.
At this point, USD/JPY dipped to an intraday low of 147.51 but has since risen to around 147.80 during US trading hours. The US Dollar Index (DXY), tracking the greenback against six major currencies, is steady around 97.38.
Earlier, Japan’s financial markets were closed for the Fall Equinox Holiday, leading to reduced activity during Asian hours. As trading picks up in Europe and the US, the dollar’s strength and FRED signals drive market dynamics.
In the US, the S&P Global Composite Purchasing Managers Index (PMI) softened to 53.6 in September, down from forecasts of 54.6. The manufacturing PMI slipped to 52, meeting expectations but down from 53 in August. Conversely, the service PMI held at 53.9, aligning with forecasts but down from 54.5 last month.
Chris Williamson, chief business economist at S&P Global, noted that tariffs are pushing up input costs for both sectors. However, many companies struggle to pass those costs to consumers, indicating potential pressure on profit margins but possibly easing inflation concerns.
The US dollar has gained support from cautious comments made by Fed officials. Chicago Fed President Austan Goolsbee explained that while rates could decline if inflation continues to fall, current policies are being kept somewhat restrictive.
Over in Japan, the Bank of Japan (BOJ) has been adjusting policies, with growing speculation for a rate hike this October—currently estimated at about 52%. The market seems to favor quicker actions from the central bank. Also, attention is turning towards the Jibun Bank Flash PMIs set for Wednesday and the BOJ meeting minutes scheduled for Thursday, which might offer further insights into future policies.
