Due to the lack of economic news from Japan, the yen was unable to find direction last Friday. The currency managed to gain against US dollar but lost out versus the euro and the pound.
Earlier today, Japan released a pretty impressive retail sales report. The report revealed that retail sales in February rose by 4.2% year-on-year, more the double the initial prediction. The increase was also an improvement from January’s 2.3% and is the biggest increase since March 1997. Hmmm, it looks like all the stimulus measures are finally taking into effect…
Looking further ahead the day, we will see Japan’s reports on unemployment, household spending and preliminary industrial production. All of them will come out at 11:50 GMT tonight.
The expectation is that Japan’s unemployment rate in February remained at 4.9%. Meanwhile, the household spending report is predicted to gain by 1.5%, slightly lower than the previous month’s 1.7% increase. Lastly, the preliminary estimate on industrial production covering the same period is a drop of 0.5%.
On Wednesday, the Tankan manufacturing index is due. The index, which assesses whether Japan’s manufacturing industry is growing or not, is predicted to print a reading of -14 for the first quarter of this year, better than last quarter’s -24. Although an improvement, the reading is still below the base line 0, which means conditions in Japan’s manufacturing industry is worsening. Given all of Japan’s “headaches,” better-than-expected results on the report could just be what the yen bulls need.