- Japanese machine orders for April missed forecasts by a huge amount
- Corporate goods prices for May also came in below forecasts, but only just
- The Japanese Yen market is looking forward to “Fed day” and reacted little
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The Japanese Yen showed little reaction Monday to news that domestic machine orders had missed estimates by a wide margin.
Orders fell 3.1% on the month in April according to official figures and rose by 2.7% on the year. They had been expected to rise by 0.5% and 7.3%, respectively. Obviously, this is a huge miss and, at face value, not great for business expectations. After all firms which aren’t buying new machines don’t obviously expect massive order pickups in the months ahead.
However, this is a volatile data series and the US Federal Reserve’s monetary-policy meeting is approaching, on Wednesday. Both these facts and the aftermath of last week’s UK-election event risk may well have limited the Yen’s reaction to the numbers, which was not great as the chart below shows.
The Corporate Goods Price index for May was released simultaneously. This is an upstream inflation indicator that need not ever be reflected in the consumer-price data that are more important for traders.
However, the CGPI was flat on the month, and rose 2.1%. Both outcomes were 0.1 percentage points below expectations.
— Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX