USD/JPY has lost ground in the Monday session. In the North American session, the pair is trading at 111.37, down 0.31% on the day. Japan’s current account surplus surged to JPY 1.96 trillion, up from JPY 1.83 trillion a month earlier. However, consumer confidence continues to decline, falling to 40.5 in March. This marked a sixth straight drop, as consumers remain very pessimistic about the economic outlook. In the U.S., factory orders declined 0.5%, matching the forecast. On Tuesday, the U.S. releases JOLTS Jobs Openings and Japan posts core machinery orders and PPI.
Weak global demand has taken a toll of Japanese exports and manufacturing output. This was reflected in a Bank of Japan forecast on Monday, which downgraded its assessment for three of the country’s nine regions. All three regions are dependent on electronic exports to China, which has been gripped by an economic slowdown in recent months. Despite the pessimistic report, BoJ Governor Haruhiko Kuroda remained optimistic, saying that stronger domestic demand would offset the decline in exports, which would enable the economy to grow at a moderate pace. Kuroda also said that he was confident that inflation would gradually accelerate towards the BoJ’s target of 2 percent.
