Ella 
During early trading in Asia on Wednesday, USD/JPY rose above the 142.00 mark. A rebound in the U.S. dollar has provided some support for USD/JPY. Investors were awaiting the release of the U.S. ISM Manufacturing Purchasing Managers’ Index (PMI) for December later on Wednesday, which is expected to rise to 47.1 from the previous reading of 46.7. USD/JPY is currently trading around 142.10, up 0.10% on the day.
The final U.S. manufacturing purchasing managers index for December was 47.9, compared with the previous reading of 48.2, which was lower than expected. Output fell at the fastest pace in six months as a recent decline in orders intensified. The U.S. dollar fell across the board as the Federal Reserve released a dovish stance after its December meeting. However, a strengthening U.S. economy may prevent the dollar from falling further. The International Monetary Fund (IMF) predicts that the US economy will grow by 1.5% in 2024, compared with 1.2% for the Eurozone and 4.2% for China.
Market participants will be closely watching whether the Bank of Japan may consider adjusting monetary policy. Bank of Japan Governor Kazuo Ueda said on December 25, 2023 that the probability of the Bank of Japan continuing to stably achieve the 2% inflation target seems to be gradually increasing.
Later on Wednesday, the final value of the U.S. ISM Manufacturing Purchasing Managers Index and the minutes of the latest Federal Reserve meeting will be released. Japan’s Nikkei Manufacturing Purchasing Managers’ Index will be released on Thursday. Japan’s Nikkei Bank Services Purchasing Managers’ Index and Consumer Confidence Index will be released on Friday. The US Non-Farm Payrolls (NFP) report will be closely watched and may keep the USD/JPY currency clear.
