EUR/USD up 0.14%. Japan’s manufacturing activity unexpectedly dropped in May.

EUR/USD slightly increased during Asian session today. As of 3:00 AM EDT the pair was trading at 1.1234, which is 0.14% higher than the previous close.

Asian shares finished mixed today. Below is presented the performance of major indices:

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  • Shanghai Composite closed at 2,843.65, up 0.64%.
  • Nikkei 225 lost 0.49% finishing at 16,654.60.
  • Hang Seng was trading at 19,787.23 as of 3:48 PM HKT, which is 0.33% lower than the previous close.
  • S&P/ASX 200 closed at 5,318.90, down 0.61%.
  • India’s Sensex was trading at 25,295.67 as of 1:20 PM IST, almost unchanged from the previous close.

The Japanese manufacturing activity unexpectedly contracted in May. The Nikkei-Markit flash manufacturing purchasing managers’ index (PMI) dropped to 47.6 in May, which represents the biggest contraction in activity levels in more than four years.

“Manufacturing conditions deteriorated at a faster rate mid-way through the second quarter of 2016, suggesting the aftermath of the earthquakes were still weighing heavily on goods producers. Both production and new orders declined sharply and at the quickest rates in 25 and 41 months respectively. One of the primary reasons behind the fall in total new orders was a marked contraction in foreign demand, which saw the sharpest fall in over three years” said Amy Brownbill from Markit.

Another data from Japan showed that the Trade Surplus in April was 823.5 billion yen, which is higher than the economists’ forecasts for a 492.8 billion yen increase.

“The April trade surplus was due in large part to weak imports. Still, the data was enough to trigger yen buying. The trade numbers came out against a political backdrop that does not favor Japan intervening to weaken the yen, thus making it relatively easy for participants to buy back the yen” said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.

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I’m a finance specialist with 4+ years of working experience, out of which 2 years as a SME relationship manager at Byblos Bank and 2 years as a Finance Director in a Food & Beverage sector. My academic background include BA in economics, MA in finance, CFA Level 1 and F1, F2, F3 level of ACCA. I’m also experienced in Forex/CFD trading and Forex/ Equity markets analysis.

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