Factory activity in Japan witnessed the steepest decline in growth in over three years during October. The Jibun Bank Flash Japan Manufacturing PMI slid to a seasonally adjusted 48.5 in October from a final reading of 48.9 in September.

New orders in the manufacturing sector fell at the steepest pace in nearly seven years as a result of the ongoing trade tensions and general weakness in global economic growth. Factory orders and future output also shrank in October.

The flash composite PMI, which includes the performance of both the manufacturing and services sectors, also fell in contraction, coming at 49.8 in October from 51.5 in September. The contraction was driven by a slower pace of growth in the otherwise robust services sector as outstanding business shrank. The flash services PMI declined to a seasonally adjusted 50.3 in October from 52.8 in September.

The release of this news turned USD/JPY bearish but it has since recovered and has steadied to trade around 108.61 at the time of writing.