The Japanese Yen appreciates following the positive economic data on Monday.
Japan’s Manufacturing PMI posted a 49.8 reading for August, against the previous 49.5.
The latest US Personal Consumption Expenditures Index data diminish the odds of an aggressive Fed rate cut in September.
The Japanese Yen (JPY) remains stable against the US Dollar (USD) after the release of July's US Personal Consumption Expenditures (PCE) Index data, which led traders to scale back expectations of an aggressive Federal Reserve rate cut in September.
According to the CME FedWatch Tool, markets are fully anticipating at least a 25 basis point (bps) rate cut by the Fed at its September meeting. Traders are now likely to focus on the upcoming US employment figures, including the Nonfarm Payrolls (NFP) for August, to gain further insights into the potential size and pace of Fed rate cuts.
On Monday, Japanese companies reported a 7.4% increase in Capital Spending for the second quarter. Additionally, the country’s Manufacturing PMI for August was revised upward to 49.8 from 49.5, indicating a trend toward stabilization. On Friday, a rise in Tokyo inflation reinforced the Bank of Japan's (BoJ) hawkish monetary policy stance, boosting the JPY and capping gains in the USD/JPY pair.
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