Japan Tankan Report to dictate the USDJPY direction
June 30, 2009 by Greg Michalowski · Leave a Comment
The Japanese Tankan Report for the 2nd quarter. The Tankan report indexes the responses from a survey to 1200 large Manufacturers and Non Manufacturers firms. It is thought the report is a leading indicator of economic health as businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity.
Last quarter the Manufactures Index fell to -58 from -24. This was the lowest level going back to 1974. The Non-Manufacturing Index fell to -31. This was the lowest level since March 1999.
The expectation is for a a rise in each category this quarter. The Manufacturers Index is expected to rise to -43. The Non -manufacturing Index is forecast to rise to -27.
Along with the current condition index will be an index for the future Outlook. The Outlook for both categories are expected to show increases to -34 from -51 in Manufacturing. For Non Manufacturing the Outlook is forecast to increase to -23 from -30 last quarter.
The release is due out at 7:50 tonight.
The USDJPY has been moving higher over the last few days. The price is now back in between the 100 and 200 day moving average. The 100 day moving average (blue line in the chart above) comes in at 97.02 and the 200 day moving average (green line) currently comes in at 96.08. These level will help guide the market direction. A move below the floor would tip the bias to the downside. A move above the ceiling would be bullish.
Last night Japan’s Employment statistics for May were released. The Job to Applicant ratio, which measures the number of jobs per unemployed person fell to 0.44 from 0.46 last month. The Unemployment rate rose to 5.2% from 5.0%. This was the highest rate in 5 years. Despite the increase in unemployed household spending rose by 0.3% (versus expectation of a -1.5% decline). The governements stimulus was cited as the reason for the rebound. This was the 1st increase in 15 months.
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