Ella 
In early Asian trading on Tuesday, USD/JPY maintained modest gains after rebounding from a low of 149.55. USD/JPY is currently trading around 149.76, up 0.03% on the day. However, the market is still worried about the intervention of the Japanese authorities in the foreign exchange market.
The latest economic data released on Tuesday showed that Japan’s Nikkei Bank Manufacturing Purchasing Managers’ Index in October was 48.5, lower than the expected value of 48.9. At the same time, the services purchasing managers index was 51.1, lower than the previous value of 53.8.
Last week, Bank of Japan Governor Kazuo Ueda reiterated that the Bank of Japan would “patiently maintain the current easing policy.” However, the market will focus on possible foreign exchange intervention measures taken by the Japanese authorities to support the depreciation of the yen.
On the other hand, a weaker U.S. dollar could limit USD/JPY upside. The U.S. dollar index (DXY), which measures the dollar’s value relative to a basket of foreign currencies, fell to a one-month low of 105.57. U.S. Treasuries have been volatile this week, with the 10-year yield hitting 5.02% for the first time since 2007, before reversing course and falling to 4.865%.
The Chicago Fed’s national activity index suggests the U.S. economy is still some way away from recession. The Chicago Fed National Activity Index rose to +0.02 in September from -0.22 in the previous month. An indicator of zero means the economy is expanding at its current pace.
Traders will be closely watching Tuesday’s U.S. S&P Global Purchasing Managers’ Index data. Later this week, preliminary estimates of U.S. third-quarter gross domestic product and the core personal consumption expenditures index will be released on Thursday and Friday, respectively. Fed officials will not make any speeches this week due to the quiet period before next week’s Fed meeting.
On the yen front, Japan’s August coincident indicators and leading economic indices will be released on Wednesday. On Friday, focus will shift to the annual rate of Tokyo Consumer Price Index for October. These data will provide direction for USD/JPY.
