June 12, 2012
No wonder they call it the Land of the Rising Sun – that’s all the yen did yesterday! With risk aversion back in tow, the yen was the biggest winner in yesterday’s currency battles. EUR/JPY closed 145 pips lower to finish at 99.20, while GBP/JPY dropped 37 pips to end the day at 123.07.
Rising bond yields and skepticism surrounding the Spanish bailout caused people to unload their positions in riskier assets, which helped benefit the yen. With uncertainty surrounding Spain and the Greek parliament elections coming up later this week, there sure is a ton of potential for the yen to make a nice run up the charts.
In other news, tertiary industry activity dropped by 0.3% in April, down from the 0.4% increase we saw the month prior. This suggests that Japanese companies are spending less on outsourcing, which could indicate a slowdown in business activity.
Late tonight, core machinery orders will be coming in at 11:50 pm GMT. Word out of Tokyo is that machinery orders rose by 1.9% in the past month, which would be a nice improvement from the 2.8% decline we saw the month before.
"The only cable I watch is the pound baby."