China’s PMI Sends the Japanese Yen Down | Finance Brokerage

The Japanese yen was down to its lowest since May, as investors’ appetite for riskier assets grew on upbeat news concerning China’s economy.

The yen fell by 0.2% to 109.72 to hit a six-month low against the US dollar. The safe-haven currency last stood at 109.56.

The New Zealand dollar, meanwhile, headed the rally of riskier currencies, which was prompted by positive survey data in China’s manufacturing sector.

Against the greenback, the kiwi climbed 0.8% to 0.6475, reaching its strongest gain in a month.

The New Zealand dollar also rose by 0.8% to 70.94 against the Japanese yen, its highest level since August.

Meanwhile, the British pound weakened 0.1% to 1.2910 against the dollar. This followed after a series of polls signaled significant shrinking in the lead of the Conservative Party ahead of the election on December 12.

S&P futures are up, and there is a risk-on mood, according to senior market strategist Jason Wong.

China’s Manufacturing PMI Weighs on Japan Yen

The risk-on mood came after survey figures showed China’s factory activity surprisingly improved in the previous month. This reinforced the data released by the National Bureau of Statistics (NBS) last week.

Survey figures from a private sector in China revealed that the country’s purchasing manger’s index (PMI) grew to 51.8 in November from 51.7 a month earlier.

The latest data marked the fastest expansion in almost three years when manufacturing PMI rose by 51.9 in December.

Total new orders and factory production also improved, according to the survey.

Still, chief China economist Larry Hu stated that optimism in the world’s second-largest economy could face negativity. As some momentary tailwinds fade, like a stronger outlook on the trade deal and warm weather.

Beijing has threatened last week to exercise firm countermeasures. This was after US President Donald Trump signed legislation backing anti-government protesters in Hong Kong.

China has yet to elaborate on the details of the said countermeasures.

The Australian dollar, a currency highly sensitive trade-related matters, was up 0.4% to 0.6794 against the greenback.

The Aussie was on course for its biggest gain in two weeks.

The Chinese yuan was steady at 7.0420 per dollar, with hopes for further monetary easing in the country and the unclear state of trade talks keeping the currency on even ground.

Senior FX strategist Rodrigo Catril said the market was taking it with a degree of salt waiting for clarity.

Catril added that no one is going to be taking major positions until they get more clarity on the trade front.