Anticipating decisive measures of the Bank of Japan, traders have been actively purchasing the yen, regardless of a slight increase in the services PMI. The index gained mere 0.6% in February; while analysts had forecasted that it would rise to the level of 0.8%.
Frustrating news drove the USDJPY rate to 81.76. However, later the yen strengthened by 25 basis points.
A stirred up business activity is another signal to Japan's central bank to ease the monetary policy at its meeting on April 27. In addition, the International Monetary Fund strongly recommends that the Bank of Japan better supports its fragile economy, as, according the IMF experts, the bank has room for unconventional steps.
On Thursday Bank of Japan governor Masaaki Shirakawa underlined that the bank had been doing its best to overcome deflation. The regulator remains determined to meet its 1% inflation target.