On Monday (05/July), the Japan Bureau of Statistics published the service PMI data from Jibun Bank at 48.0 in June. That was slightly recovered from the level of 46.5 in the previous period.

However, the figure this time is still below 50.0 which is the threshold of expansion and contraction. Historically, Japan's service activity is stuck. It has been 17  months in a contraction zone. 

The Jibun Bank survey is included some sectors. Those are the like the information, transportation sector, business services, etc. The communications, and consumers (exclude the retail) are included too. 

Almost all service sectors surveyed are under pressure because most of the public is still holding back spending amid the high uncertainty caused by the Corona virus pandemic. 

The Demand is Affected by the COVID-19 Cases

The rising cases of the corona virus new variants in recent months did press demand in Japan, both from within and outside the country. This underlines the challenge for the country. 

It is known that the Japanese economy needs to recover from the economic contraction in the first quarter. In fact, the Central Bank of Japan (BoJ) has expressed an optimistic view on the future economic outlook.

The service sectors business there shows that the activity is still sluggish. Japan is battling a wave of the newest varian of the COVID-19 s that is hampering the momentum of the recovery.

However, the company will always build the capacity. That is done as the anticipation of the increased demand. It is although the job creation has moved to a low point for four months. 

The USD / JPY Tries to Be Recovered

Broadly speaking, the Services PMI data in Japan released this morning did not have a significant impact on the movement. It is especially of the Yen against the US Dollar. 

The USD/JPY pair traded in the range of 111.08. That was gaining 0.05 percent from the daily Open price. The rise in the US Dollar was more due to a technical recovery after last weekend's bearish turmoil. 

Furthermore, the investor attention this week will be focused on the FOMC Minutes to be released on Thursday morning. The index of that US dollar declined around the level of 92.20.

That was happened on the European trade session on Monday. It was following the Non-farm Payroll or the NFP data and the jobless rate in America which is quite contradictory.

The FOMC Release is Awaited 

The report generally suggests a continued recovery in the labor market. However, that is partially lowers market expectations for a Fed rate hike due to a reason. 

Basically that is because the Fed is not expected to be interested in tapering (trimming the bond-buying program) or raising interest rates as long as the unemployment rate is still high.

The Financial markets then reacted to the news. Wall Street stocks soared, while the U.S. dollar slumped. Usd's position only declined slightly today, as American exchanges will close in celebration the independence day. 

Meanwhile, the traders and investors are also looking forward to the release schedule of FOMC minutes to confirm the Fed's stance again. The NFP report gave something to all. 

Tapering Clue May Increases the Interest Rate

The US interest rate markets slightly softened their position on the Fed's early tightening and the dollar ended in a weaker position too. Today's U.S. public holiday signals trading will be quiet.

That is though the Fed's story will certainly surface again on Wednesday night as investors study the minutes of the monumental June 16 FOMC meeting. An analyst gave his opinion. 

He think that more information about when FOMC will do a tapering for its assets purchasing can increase the dollar and interest rate in America. The outlook for inflation has been moved too.