The Jibun Bank Services PMI may influence buyer demand for the Japanese Yen. The BoJ is looking to the services sector to drive demand-driven inflation after Spring wage hikes, potentially leading to a higher interest rate environment. This sector plays a significant role in the Japanese economy, contributing over 60%.
Investors should pay attention to sub-components such as input prices, employment, and new orders. Additionally, keeping an eye on Bank of Japan commentary is crucial. Their views on inflation, economic outlook, and potential interest rate hikes could have a significant impact. Yen weakness is putting pressure on the BoJ to consider a summer rate hike.
In the US, upcoming jobless claims data and preliminary private sector PMIs are important for investors. Economists are expecting a slight decrease in initial jobless claims, which could indicate a tighter labor market. This could lead to wage growth, increased disposable income, and potentially higher consumer spending and demand-driven inflation. Tighter labor market conditions may also influence the possibility of a Fed interest rate hike.
The S&P Global Services PMI is another key indicator to watch for in the US. With the services sector making up over 70% of the economy, housing services inflation is a key focus. This data could have an impact on the Fed’s rate path moving forward.