The Japanese yen is stronger by 0.6% at 109.46 per dollar as of 12:07 p.m. ET.
Earlier in the morning, it strengthened by as much as 0.7% to 109.35 per dollar.
The latest data from Japan showed that the stronger yen has been crushing exports. Goods sold abroad fell by 10.1% in April, while imports slumped by 23.3%. This left a trade surplus of 823.5 billion yen ($7.5 billion) – aka the largest since March 2010.
Notably, the yen has appreciated by as much as 9% against the dollar this year, which has made Japanese goods less attractive to overseas buyers.
Additionally, a preliminary survey showed Japanese manufacturing activity shrank at the fastest pace in over three years amid a drop in new orders. The Markit/Nikkei Flash Japan Manufacturing Purchasing Managers Index (PMI) fell to 47.6 in May on a seasonally adjusted basis, from a final 48.2 in April.
As for the rest of the world, here’s the scoreboard:
- The US dollaris little changed at 95.46 after a preliminary reading of manufacturing activity in May showed that output fell for the first time since the peak of the Great Recession. Markit’s flash manufacturing Purchasing Manager’s Index (PMI) out Monday was 50.5. Economists had estimated that it improved to 51 from 50.8, according to Bloomberg. This index is basically on the edge of contraction, with 50 being the border between expansion and shrinkage. Separately, Deutsche Bank thinks the US dollar is looking cheap. “The dollar has undergone a painful correction since the start of the year but we don’t believe this marks the end of the dollar uptrend,” the Deutsche Bank team wrote. “At around 8% the size of the dollar’s correction is the third largest in history compared to other dollar uptrends. The calendar length of the correction is approaching a record too. At 100 days it is the second longest in history which together with the size suggests we have likely seen the low in the dollar this year.” The euro is weaker by 0.2% at 1.1197 against the dollar after European PMIs came in slightly lower than expected. Preliminary figures from Markit’s Purchasing Manager’s Index showed that European industry expanded marginally less than expected in the month, with a composite reading of 52.9, down from 53 in April, and lower than the 53.2 forecast. Activity in Europe’s service sector was flat at 53.1. The Russian ruble is weaker by 0.3% at 66.9669 per dollar as oil prices continue to trickle lower. Brent crude oil is lower by 1.9% at $47.81 per barrel. Still, a bunch of Wall Street analysts think the petro-currency has some room to advance – even if oil prices don’t appreciate significantly.The Brazilian real is weaker by 0.3% at 3.5730 per dollar. Additionally, Business Insider’s Linette Lopez recently noted that the new government is already in serious trouble.