The Japanese yen that plunged against its major counterparts in early Wednesday Asian trading following the Tankan survey report, reversed direction around 7:55 pm ET. The yen thus recovered from near a 4-week low against the US dollar and climbed from a 5-day low against the European currency, the British pound and the Swiss franc.
Japanese sentiment among large manufacturers plummeted at a record rate in the first quarter of 2009, the Bank of Japan's Tankan Survey revealed today, posting a diffusion index score of -58. That was worse than analyst expectations for -55 following a score of -24 in the previous quarter.
It was the sixth straight quarter of decline, and the fall of 34 points from the previous survey in December marked the largest fall on record.
It was also worse than the previous record low of -57 in June 1975. However, the large manufacturers' outlook for the June quarter posted a mild recovery, coming in at -51.
Losses in the yen were curbed on speculation President Barack Obama will let U.S. automakers go bankrupt, stimulating demand for the Japanese currency as a haven from the global financial crisis.
The Japanese stock market was trading higher today, tracking the overnight gains on Wall Street. Investors brushed aside the Bank of Japan's quarterly Tankan Survey results.
In early morning trades, the benchmark Nikkei 225 Index was gaining 83.40 points, or 1.03%, to 8,192.93 and the broader Topix Index of all First Section Issues was adding 12.04 points, or 1.56%, to 785.70.
Against the US dollar, the Japanese yen traded near a 4-week low of 99.48 before gaining ground during early Asian deals on Wednesday. At 8:00 pm ET, the yen reached a high of 98.24 against the dollar, compared to 98.99 hit late New York Tuesday. The dollar-yen pair is currently trading at 98.71 with 96.9 seen as the next target level.
The Japanese yen that closed Tuesday's North American session at 131.18 against the European currency touched a 5-day low of 131.93 at 7:55 pm ET. The yen is currently quoted at 130.38 against the euro. If the Japanese currency gains further, 128.2 is seen as the next target level.
Against the British pound, the Japanese currency climbed to 140.83, moving from Wednesday's early Asian session 5-day low of 142.90. The next upside target level for the Japanese yen is seen around 136. The pound-yen pair is currently quoted at 141.16, compared to Tuesday's closing value of 141.81.
The Japanese yen that slipped to a 5-day low of 87.37 against the Swiss franc during today's early Asian deals strengthened thereafter. The yen that closed Tuesday's New York deals at 86.90 versus the franc hit a high of 86.21 at 8:00 pm ET. On the upside, 84.9 is seen as the next target level for the yen. The franc-yen pair is presently trading at 86.38.
Traders now look forward to the German retail sales and the euro-zone jobless rate-both for February and the manufacturing PMI reports from major European economies for March in the upcoming session.
Across the Atlantic, the ADP National Employment report, which sheds light on non-farm private employment, is scheduled to be released at 8:15 AM ET.
The results of the manufacturing survey of the Institute for Supply Management are due out at 10 AM ET. Economists expect the index to show a reading of 36 for March.
The Commerce Department's construction spending report to be released at 10 AM ET is expected to show a 1.6% decline in spending for February.
Data on Pending Home Sales, which is a leading indicator of housing market activity released by the National Association of Realtors, is due out at 10 AM ET. The index is likely to show a 2% decline for February.
The Energy Information Administration is scheduled to release its weekly petroleum inventory report at 10:30 AM ET.
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