The Japanese yen weakened today due to risk appetite caused by news about a trade truce between the United States and China. The currency has trimmed its losses later, though, erasing them against some rivals outright. Macroeconomic data released in Japan over the trading session was mixed.
Markets reacted strongly to the news that the United States and China managed to reach a truce in a trade war. The Japanese yen, being a safer currency, weakened due to the resulting risk appetite.
As for Japanese macroeconomic data, the Tankan Manufacturing Index dropped from 12 in May to 7 in June, below the consensus forecast of 9. At the same time, the Tankan Non-Manufacturing Index edged up from 21 to 23 instead of falling to 20 as analysts had predicted.
Japan’s Cabinet Office reported that the consumer confidence stood at 38.7 in June, down from 39.4 in May. That is below the market consensus of 39.2.
USD/JPY was up from 107.91 to 108.53 intraday before backing off to 108.27 by 13:50 GMT today. GBP/JPY was little changed at 137.03 after rising to the session high of 137.77 earlier. The Swiss franc, being a safe currency as well, suffered even more than the yen, and as a result CHF/JPY dropped from 110.53 to about 110.01.
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Japanese Yen Drops on Risk Appetite, Tries to Rebound. Domestic Data Mixed
