Yen remains under pressure as China PMI, U.S. data eyed
TOKYO – Japanese shares could get support from a weaker yen on Monday, while investors were generally cautious as they awaited a Chinese manufacturing survey later in the session as well as key U.S. data this week.
HSBC will release its final report on China’s manufacturing sector, after its preliminary flash reading came in at 50.4. Official data released over the weekend showed China’s factory growth held at an 18-month high last month on firm domestic and foreign demand.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down slightly in early trade, while ASX/200 index .AXJO was up about 0.1 percent.
Last month, Japan’s benchmark Nikkei .N225 rallied 9.3 percent, spurred by strong earnings and a weakened yen, with the index hitting its highest closing level in nearly six years on Thursday.
The dollar rose about 0.1 percent to 102.55 yen, moving back toward a six-month high of 102.61 yen touched on Friday. The euro was steady around 139.35 yen, not far from Friday’s five-year high of 139.70 yen.
“The dollar finished November at its highest level against the yen since May. It appears to have broken out of the six month consolidative pattern,” Marc Chandler, global head of foreign exchange strategy at Brown Brothers Harriman said in a research note.
While the 140-yen area could mark psychological resistance for the euro, the 141-yen level could be more significant from a technical perspective, Chandler said, as it represents 61.8 percent retracement of the euro’s slide from 170 yen in 2008 to the 2012 low around 94 yen.
U.S. data later in the week remains a key focus, with the U.S. Federal Reserve poised to reduce its stimulus as soon as it deems the economy is strong enough.
Nonfarm payrolls for November is scheduled for release on Friday, with economists expecting an increase of 185,000 jobs last month, down from 204,000 in October, according to a Reuters survey of economists.
Other major economic indicators due this week include the Institute for Supply Management’s data on the U.S. manufacturing and services sectors. The ISM factory index will be released later on Monday, and the ISM services index is due out on Wednesday.
In commodities trading, gold was down about 0.3 percent at $1,247.96 an ounce, undermined by signs of a stronger U.S. economy that could compel the Fed to reduce its stimulus. Gold has lost around a quarter of its value so far this year, on track to post its first annual loss in 13 years.
Brent crude oil gained about 0.2 percent to $109.87 a barrel, after shedding more than $1 on Friday while U.S. crude was about 0.1 percent higher at $92.76 as traders weighed supply outages in Libya against U.S. inventory levels.