May 28, 2012
The Japanese yen's performance was as mixed as a bag of nuts last Friday, but it did manage to end the week higher than its major counterparts. This week, the yen gapped down against its rivals so let's take a look at the catalysts that could get these gaps filled.
Over the weekend, the BOJ released its monetary policy meeting minutes which revealed that several officials felt wary about further easing as this could be misinterpreted as monetization by the central bank. This means that they are worried that the public might think that the BOJ's large asset purchases are being used to finance government spending, which isn't really the case.
Today, Japan is set to release a few reports which could result in additional volatility for the yen pairs. The household spending data is due 11:30 pm GMT and is expected to show an annualized 2.5% increase for April, weaker than the 3.4% growth seen last March. Meanwhile, the unemployment report could show that Japan's jobless rate held steady at 4.5% so make sure you watch out for that at 11:30 pm GMT as well.
A few minutes later, at 11:50 pm GMT, Japan will print its retail sales data for April. This report is also expected to highlight weaker consumer spending in Japan as the yearly figure could come in at 6.2%, much lower than the previous 10.3% increase.
"The only cable I watch is the pound baby."