Forex: USD/JPY – Testing 100

iNVEZZ.com Monday July 1th: The yen has racked up losses against the USD so far today and, with the price reaching 99.86 in European afternoon trading, the pair is threatening to breach the 100.00 level for the first time since the beginning of May.

Earlier today, the Bank of Japan’s quarterly Tankan survey revealed the highest level of optimism among large manufacturers in two years. The Tankan large manufacturers index improved for the first time since March 2011 to positive 4 points in the second quarter of the current year, from minus 8 in the previous period.

Bank of Japan economists expect the Japanese economy to keep growing at least until the second quarter of 2014, attributable to the Abe government’s monetary policy aimed at boosting the level of economic activity.

Across Asia, stock markets gained today with the Nikkei Stock Index rising by 1.2 percent.
Meanwhile, China’s Purchasing Managers Index was today reported to have fallen to 50.1 from 50.8 in May, amidst fears of a credit crunch as the People’s Bank of China raised its interest rate to a record six percent to curtail irresponsible lending by Chinese banks.

The Markit US Manufacturing Purchasing Managers Index for June, released today, exceeded the forecasted 50.6 by rising to 51.9, but falling from the reading in May, which was for 52.3 points.
The yen’s relative weakness against the USD has been confirmed by the market’s reaction to these releases.
US construction spending data for May and ISM Manufacturing PMI are due out around now, at 15:00 BST.

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