Global macro overview for 23/02/2016:
Not only the Europe manufacturing PMI was worse than expected, but Japan's Markit/Nikkei Flash Manufacturing PMI also defeated expectations. For the month of February, the manufacturing PMI was 50.2 vs. previous 52.3 and consensus 52.0. The main reason for such a drop may be the fact that new export orders fell at the fastest pace in three years. In conclusion, the figures is a sign that businessmen are not confident that the government and the Bank of Japan's moves to support the economy, including January decision to cut the interest rate to below zero, are effective. Moreover, those are worrying signs that the economy slows faster than anticipated.
Let's now take a look at the USD/JPY technical picture. After the pair had managed to retrace to the 38% Fibo level, the bears took the control over the market and now they are trying to make another low. Importantly, the pair is trading just above the key daily support at 110.06 and any break lower would accelerate the losses.