Investors assess cooling US labor data and resilient Japan manufacturing ahead of Thursday’s Nonfarm Payrolls report.
The USD/JPY pair stabilized near 162.50 on Wednesday, reflecting investor caution after mixed US economic data and persistent pressure on the Japanese Yen. The Yen remains close to a 40-year low despite signs of strength in Japan’s manufacturing sector.
US factory activity expanded in June, with the ISM Manufacturing PMI at 53.3, though below May’s 54 and missing forecasts. New orders dipped to 56, while the Prices Paid Index fell to 73 from 82.1, signaling easing but still-high inflation. Private payrolls rose by 98K in June, below the expected 113K and May’s 122K, raising concerns about labor market cooling.
Japan’s Tankan Large Manufacturing Index hit an eight-year high in Q2, with inflation expectations above the Bank of Japan’s 2% target, fueling speculation of further policy normalization. Markets await Thursday’s US Nonfarm Payrolls report for clues on Fed rate cuts.