The Japanese yen continued to strengthen significantly across the board and investors digested news about the potential tapering. On Tuesday, BoJ announced that it would reduce its bond purchases on the longer term 20 and 40 year bonds. This led the markets to react to the news as a form of tapering from the BoJ. Following through on the gains from Tuesday, the Japanese yen rose 1.07% on the day on Wednesday.
Economic data remained sparse with the exception of the manufacturing and industrial output data from the UK. According to the report from the ONS, UK’s manufacturing output rose 0.4% on the month beating estimates of a 0.3% increase. Industrial output was also stronger, rising 0.4% on the month as expected. Construction output was weaker at 0.4%, missing estimates of a 0.7% increase.
Looking ahead, economic data will shift to the U.S. with the producer price index data expected to show a 0.2% increase on the headline and 0.2% increase on the core. FOMC Member, Dudley will be speaking later in the day.
