The USD/JPY pair has resumed its upward trajectory.
The Japanese Yen, in combination with the US Dollar, is experiencing a decline. The current exchange rate for USD/JPY is 149.79.
The primary factor contributing to the depreciation of the JPY is the substantial disparity in interest rates between the US Federal Reserve and the Bank of Japan.
Simultaneously, the Japanese economy seems to be in robust condition, as suggested by the Tankan data. The latest figures indicate that the non-manufacturing sector is demonstrating its strongest activity performance in 32 years. The service sector is benefiting from the full restoration of economic activities post-pandemic.
Confidence levels among major manufacturers have exceeded expectations, and business sentiment in the service sector has reached multi-year highs. In September, the Large Business Sentiment Index rose by 9 points, surpassing the previous 5 points. Industries like automakers and food and beverages are notably more optimistic.
The service sector’s sentiment index reached 27 points, the highest since 1991.
The devaluation of the yen is amplifying these positive effects. Tourist prices in the country appear to be more competitive, stimulating activity in the non-manufacturing sector. The weakened yen is also dissuading residents from traveling abroad, redirecting their recreational pursuits within the country. Consequently, the devaluation of the JPY is proving to be another supportive factor for the economy.
The post The Japanese Yen Continues Its Descent: Overview for October 02, 2023 appeared first at R Blog – RoboForex.