Japanese economic data is beginning to improve, but this is having a minimal impact of the Japanese Yen.
Leading indicators rose from 36.4 percent to 50 percent and we expect this strength to pass over to the Eco Watchers Survey, which is due for release this evening. Labor cash earnings have been on the rise, which should help to boost consumer confidence. Meanwhile the Japanese government is coming closer to announcing a new Bank of Japan Governor. The latest nominee is Shirakawa, the current acting Governor. There is a decent chance that he will be approved by the Liberal Democratic Party and the Democratic Party of Japan. In the past Shirakawa has been seen as a hawk on monetary policy, but economic conditions have changed significantly and as a result, it is not clear whether he will be willing to cut interest rates.