The yen that dropped in early Wednesday Asian deals after the Bank of Japan released its quarterly Tankan survey report at 7:50 pm ET reversed direction shortly. The yen thus moved off slightly from a 2-month low against the euro and multi-day lows against the aussie, NZ dollar and the Swiss franc.
The Bank of Japan’s quarterly Tankan survey showed that the large manufacturers’ index hit a fresh two-year high in the third quarter of 2010, gaining for the sixth straight quarter while posting a score of 8. That beat expectations for a score of 7 following the Q2 reading of 1.
But the outlook for the fourth quarter took a pessimistic turn with a score of -1, worsening for the first time in seven quarters. Analysts had expected the outlook to show a score of 3 – the same as in the previous three months.
The non-manufacturers index came in at 2 versus expectations for a score of -2 after showing -5 in the second quarter. This outlook also suggests a downturn, however, with a score of -2 expected for the December quarter – although that still beat expectations for a -4, which was also the score as in the Q2 outlook.
The weak outlook gives the Bank of Japan more to chew on as it heads into next week’s monetary policy meeting. Interest rates already rest at a record low 0.10 percent, and now speculation suggests that the bank is considering additional quantitative easing measures.
The yen that tumbled to a 5-day low of 86.15 against the Swiss franc at 8:20 pm ET recovered slightly thereafter. As of now, the yen is worth 85.97 against the franc.
After falling to near a 2-month low of 114.21 against the euro at 8:30 pm ET, the yen gained slightly. At present, the yen is worth 113.91 against the euro.
The yen is currently worth 83.87 against the dollar and 132.67 against the pound, compared to an early Asian session lows of 84.10 and 132.97, respectively.
The yen slipped to a 2-day low of 62.18 against the NZ dollar before bouncing back at 8:30 pm ET. Currently, the yen is worth 61.99 against the kiwi.
The yen dropped to an 8-day low of 81.37 against the Aussie at 8:30 pm ET. Thereafter, the yen climbed slightly and the pair is now worth 81.16.
Traders are now likely to focus on the European session, in which the French consumer confidence index for September, Italian PPI for August and business confidence for September, U.K. mortgage approvals data for August, Eurozone economic confidence and Swiss KOF leading indicator- both for September are slated for release.
There are no major economic reports due to be released from the U.S. today.