Japan Tankan Index for November
- Manufacturing index at +5 (down from +7 in October).
- Non-manufacturing index at +19 (down for the 5th month, previously +20).
- Outlook:
- Manufacturing index expected to reach +6 by February.
- Non-manufacturing index projected to rise to +25.
- Additional Insights:
- Weak demand in the Chinese market is impacting Japanese automakers and auto parts sectors.
- Rising material costs are pressuring profits, despite ongoing demand.
- Some clients are holding off on investments, awaiting the outcome of the U.S. presidential election.
- Service-sector confidence is affected by extreme weather, though inbound tourism offers some support.
Following last week’s Bank of Japan meeting, where interest rates were held steady but a future rate hike was hinted at, USD/JPY dipped below 153. However, the pair remains supported both technically and fundamentally, showing substantial gains since mid-September. The pullback in the USD led to a 2.5-cent decline in USD/JPY this week, which found support at the 100 SMA level yesterday as markets awaited U.S. election results and popped 2 cents higher as first results started coming out, despite the BOJ mentioning rate hikes again.
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