Release Explanation: The Takan Manufacturing Index is a broad-based measure of manufacturing strength and is considered the best gauge of its industry's health. Given the speed with which businesses react to market conditions, changes in sentiment reflected in TMI can provide an early signal of future economic activity.
Trade Desk Thoughts: Sentiment among Japan's largest manufacturers fell the most in 34 years, signaling companies are likely to cancel spending plans and cut more jobs, pushing the economy further into recession. The yen's surge to a 13-year high last week has compounded woes for Japan's manufacturers who are already reeling from a collapse in export markets. Layoffs by companies including Sony Corp. and Toyota Motor Corp. have brought the recession home to households and increased the risk of a prolonged slump.
Forex Technical Reaction: USDJPY moved up sharply following the announcement, rising from 90.50 to 91.35 before pulling back less than 62% to 90.88. The move remained consistent with the rally off the December 12 low.
Forex Technical Reaction: USDJPY moved up sharply following the announcement, rising from 90.50 to 91.35 before pulling back less than 62% to 90.88. The move remained consistent with the rally off the December 12 low.