S&P 500 — US Large Cap Index
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- EUR/JPY climbs as the Japanese Yen weakens after Monday’s PMI release.
- The Jibun Bank Services PMI dropped to 49.5 in March, signaling the first contraction in services activity since October.
- The Euro finds support from improved risk sentiment as the White House revises its tariff strategy.
EUR/JPY continues its upward momentum for a second consecutive session, trading near 162.00 during Asian hours on Monday. The Japanese Yen remains under pressure as weaker-than-expected Purchasing Managers’ Index (PMI) data offsets a hawkish Bank of Japan’s (BoJ) outlook. Investors are now looking ahead to preliminary PMI figures for the Eurozone and Germany, set for release later in the day.
The Jibun Bank Services PMI fell to 49.5 in March from 53.7 in February, which had been a six-month high, according to preliminary data. This marks the first contraction in services activity since October and the sharpest decline in nine months.
Meanwhile, the Manufacturing PMI slipped to 48.3 in March 2025 from 49.0 in February, missing market expectations of 49.2 and extending its contraction streak to nine consecutive months. The Composite PMI also declined, dropping from 52.0 in February to 48.5 in March.
Last week, the Bank of Japan maintained its policy rate at 0.5%, with board members expressing a cautious stance. However, expectations remain for further rate hikes this year as inflationary pressures and rising wages persist.
The AUD/JPY pair strengthened as the Japanese Yen weakened against its counterparts amid improved risk sentiment. This shift comes as the White House revises its tariff strategy ahead of the April 2 implementation, according to the Wall Street Journal. Additionally, geopolitical tensions have eased, with Ukrainian and US officials meeting in Riyadh on Sunday to discuss peace efforts. Meanwhile, former President Trump continues to push for an end to the three-year war.
In Europe, European Central Bank (ECB) Vice President Luis de Guindos stated in an interview with The Sunday Times that Trump’s policies are generating more economic instability than the COVID-19 crisis. Similarly, Jose Luis Escriva told Bloomberg TV on Friday that inflation and economic growth forecasts remain highly uncertain, making future interest rate decisions difficult to predict.
