USD/JPY in the Hands of the Federal Reserve
While there are no stats from Japan to consider, US economic indicators and the Fed will move the dial. There are no economic indicators from Japan for investors to consider, with the Japanese markets closed for Constitution Day So lack of economic indicators will leave the USD/JPY to respond further to the US numbers from Tuesday. The rate of quits was reportedly little changed at 2.5%, though the number of quits in the accommodation and food services industry fell by 178,000, a signal of deteriorating sector conditions.
While the overnight stats may not influence the Fed interest rate decision, cracks are appearing in the US economy that could rein in hawkish June bets. US factory orders fell short of forecasts for March, rising by 0.9% versus a forecasted 1.1%. Orders declined by 1.1% in February.
However, the weaker macroeconomic environment supports the Bank of Japan’s policy outlook, leaving monetary policy divergence in favor of the dollar.