UK Sterling vs Japanese Yen (FX:GBPJPY)
2 Years : From Dec 2011 to Dec 2013
The yen strengthened slightly against most major currencies in early Asian trading on Monday after the Bank of Japan's closely watched quarterly Tankan survey showed that sentiment for its large manufacturers' index improved in the second quarter of 2012.
The headline figure climbed to a score of -1, beating expectations for a score of -4, which would have been unchanged from the previous three months.
The outlook for the next quarter also topped forecasts, coming with a score of 1 versus expectations for a -4 after showing -3 in the previous three months.
The large non-manufacturers' index also surprised to the upside with a reading of 8, up from 5 in the previous quarter and beating forecasts for a score of 7. The outlook matched expectations at 6 after posting 5 in the first quarter.
Today's Tankan survey report is likely to take some pressure off the central bank to take further policy steps at its meeting next week. Also, the result adds to recent positive signs in the Japanese economy.
The BOJ upgraded its monthly assessment of the economy last month, saying it has started picking up moderately, in part due to reconstruction spending after the earthquake and tsunami last year.
The yen's slight rise today helped it recover the losses incurred on Friday. Safe haven assets declined on Friday as a European plan to rescue banks fueled demand for riskier assets.
The European leaders meeting in Brussels for a two-day summit agreed to make use of Eurozone's bailout funds to recapitalize the region's banks directly once an effective single supervisory mechanism is established, relieving the governments of the burden of bailing out troubled lenders.
Earlier during the summit on Thursday, the leaders approved a 120 billion-euro package to promote growth in the debt-stricken Eurozone as well as across the broader 27-nation European Union.
The yen is currently worth 79.78 per dollar, compared to a 4-day low of 80.0 hit on Friday. If the yen gains further, it may likely target the 79.4 level. The dollar-yen pair ended last week's trading at 79.88.
The yen is now worth 100.66 against the euro and 83.80 against the franc, up 0.7 percent each from Friday's 8-day lows of 101.42 and 84.45, respectively. The next upside target level for the Japanese currency is seen at 100.5 against the euro and 83.6 against the franc. The yen closed last week's trading at 101.01 per euro and 84.12 against the franc.
Against the British currency, the yen dipped to a 1-week low of 125.52 in today's early deals at 7:25 pm ET. But the yen reversed its direction thereafter and the pair is now worth 124.90 with 124.6 seen as the next upside target level for the yen. At Friday's close, the pound-yen pair was quoted at 125.16.
Looking ahead of the European session, Swiss retail sales for May and SVME PMI for June, Eurozone unemployment rate for May and the final manufacturing PMI reports for June from major European economies are slated for release.
From the U.S., ISM manufacturing index for June and construction spending for May are expected in the New York morning session.