Yen Slightly Higher After Tertiary Index Weakness

By Lujia Lin,

Chart generated using Strategy TraderTHE TAKEAWAY:Tertiary Industry Index falls the most since March > Datareflects broader signs of economic weakness, but markets continueto ignore intervention prospects > Yenslightly higher The Japanese Yen edged higher against the Dollar after the Tertiary Industry Index exhibited the sharpest monthly fall since March. Within 15 minutes of the data release, the Yen was slightly stronger versus its US counterpart at 77.63. The Ministry of Economy, Trade, and Industry reported that the overall tertiary index dropped 0.7 percent MoM in September, compared to a revised 0.0 percent change in August, the largest monthly decline since the March earthquake. September’s negative reading was driven in large part by wholesale and retail (-2.2 percent) and information and communications (-2.6 percent). Overall, the data suggests that the economic recovery in Japan remains shaky at best, and the effects of the strong currency are begin to make themselves felt in the service sector as well. Thursday’s figures round out a week of very mixed economic data from Japan. Earlier in the week, trade data showed that the country’s trade balance returned to positive in September and that the current-account surplus was much wider than expected, despite the strength of the Yen. At the same time, machinery orders returned to negative after a strong rise in August, while consumer confidence was stagnant, pointing to weaker economic activity ahead. Despite repeated threats of further intervention from policymakers in the face of the weak domestic situation, the Yen is showing no signs of halting its appreciation versus the Dollar after last Monday’s intervention; the currency yesterday hit a new post-intervention high of 77.50 versus its US counterpart. The currency can be expected to continue its advance toward the postwar highs reached at the end of October. DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2011/11/11/Yen_Slightly_Higher_After_Weak_Tertiary_Index.html

>To order reprints of this article, click here: Reprints