- HSBC China Manufacturing PMI 48.1 in April vs. 48.4 Expected and 48.3 Prior
- AUD/JPY falls as markets shift to the Yen in a risk averse move
- USD/JPY drops below a key technical level at 102.00
The Australian dollar dropped against the Yen following a weaker-than-expected China PMI print, which may have fuelled concerns over a further deceleration of economic growth in the world’s second largest economy. The HSBC China Manufacturing PMI gauge came in at 48.1 in April, which was below expectations of a 48.4 figure and compared to 48.3 in March.
The April reading represents the fourth straight month the gauge of strength in the manufacturing sector has been in contractionary territory. Data released last month showed that China’s Gross Domestic Product grew by 7.4 percent over the same period last year; its slowest pace since the global financial crisis in 2009.
Australia counts China as its largest trading partner, and would be sensitive to any weakness in the Asian giant’s economy. Although Japan also counts China as a major trading partner, concerns over an impact in economic growth has nevertheless caused markets to shift into Japanese yen which has long been considered a safe-haven currency. The AUD/JPYplunged immediately following the data release to test the critical support levels mentioned in guest commentator Paul Robinson’s analysis.
