Japanese Economy Shows Modest Gains, Misses Expectations
Japan's Tankan Large Manufacturing Index rose to 24 in Q3 from 22 in the previous reading, but missed market expectations of 25. This modest gain was overshadowed by a decline in Japan's Non-Manufacturing Index, which fell to 35 in Q3, versus 37 prior and below the expected 36.
The USD/JPY pair reacted positively to the data, rising 0.14% to around 157.50. The Japanese Yen is often seen as a safe-haven investment, but its value is also influenced by the Bank of Japan's policy, differential between Japanese and US bond yields, and risk sentiment among traders.
The Bank of Japan's ultra-loose monetary policy has caused the Yen to depreciate against major currency peers due to increasing policy divergence. However, the gradual unwinding of this policy has given some support to the Yen in recent times.