The JPY remained flat ahead of key data release with the USD/JPY trading at 101.31, down 0.02% whilst the AUD/USD traded flat at 0.9432.
Japan typically release some key pieces of economic data on the end of each quarter, namely the Tankan manufacturing index, a quarterly survey of business sentiment among major manufacturers.
Overnight, the dollar dropped against most major currencies after the disappointing regional U.S. factory data raised concerns that jobs' report may affect interest rates leaving them low for longer than expected. Meanwhile, investors are keeping an eye on the June’s nonfarm payrolls report scheduled for release next Friday.
After the quarterly Tankan survey came in below expectations, the USD/JPY pair traded at 101.30, down 0.03%. The Tankan survey came in at a reading of 12, compared to anticipations among major manufacturers of 16 in June. This is the first drop in six quarters since it pulled back to -12 in December 2012.
The June CFLP manufacturing PMI of China increased from 50.8 to 51, meeting analysts’ expectations and recovering for the fourth straight month to mark its best reading since last November.
Later on, the Japanese yen and the Australian dollar declined sharply against the US dollar despite strong China PMI data. Australia's AI Group manufacturing index slipped down 0.3 point to hit 48.9.
Elsewhere, Excon Fuji Securities found that the euro gained support after preliminary data stated that the annual inflation rate in the euro zone remained steady at 0.5% in June, raising expectations that the European Central Bank may announce further monetary easing measures.
