Daily Economic Commentary: Japan

The yen’s price action was as mixed as jellybeans as it lost to the dollar and the Aussie but gained against the euro and the pound. Did the BOJ’s monetary policy decision have anything to do with that?

Not really. Last Friday the central bank kept its monetary policy unchanged and expressed optimism for the economy. The yen strengthened a bit in the late Asian session before sentiment for the other major currencies dictated the yen’s price action.

What’s probably more headline-worthy is how Shinzo Abe softened towards a cut in corporate taxes. In a speech, he hinted that corporations could use some help to counter their potential losses from the sales-tax increase.

The only economic reports that we have to watch out for today are the BOJ monthly report and leading indicators data at 5:00 am GMT and Japan’s current account numbers at 11:50 pm GMT.

When risk is off, the yen bulls love to party! The Japanese currency took advantage of traders’ appetite for lower-yielding currencies yesterday, as it raked in the gains against its counterparts. EUR/JPY tumbled below the 132.00 handle while GBP/JPY sank below 156.00.

Japan’s data was actually slightly weaker than expected yesterday, as the leading indicators index showed a 106.5% reading instead of the estimated 106.9% figure. The August figure was also lower than the previous month’s 107.8% reading, hinting at a slight downturn in economic performance.

Earlier today, Japan reported a weaker than expected current account balance. The surplus increased from 0.33 trillion JPY to 0.35 trillion JPY but it was weaker than the estimated 0.65 trillion JPY figure.

Later on, Japan will report its Economy Watchers sentiment index and possibly see an improvement from 51.2 to 52.2, reflecting improved optimism for the Japanese economy. Watch out for the actual release at 6:00 am GMT and keep tabs on potential changes in market sentiment to figure out how the yen could behave. Good luck!

Doji alert! The yen got almost nowhere against its counterparts yesterday thanks to the lack of market-moving catalysts in the streets. USD/JPY, GBP/JPY, and EUR/JPY capped the day with dojis without making significant intraday highs and lows.

It didn’t even help the yen that the economy watchers sentiment report came in at 52.8 instead of the expected 52.2 reading.

A few hours ago the Bank of Japan released its latest meeting minutes. The central bank expressed that it would continue its stimulus program as long as necessary, but that the improvements in business confidence and the economy aren’t motivating them to make any changes right now.

At 6:00 am GMT today we’ll see Japan’s preliminary machinery tools orders, followed by the core machinery orders at 11:50 pm GMT. The reports are expected to show improvements, but watch these closely in case we see surprises!

Looks like the yen bears won’t go down without a fight! Yen pairs were tugged this way and that, as risk sentiment kept shifting yesterday. EUR/JPY jumped to a high of 132.19 then slipped to a low of 131.24 while USD/JPY managed to pull up to a high of 97.65.

Japan’s preliminary machine tools orders printed a whopping 6.3% annual decline for August, worse than the previous month’s 1.7% drop. Although this triggered a yen selloff during the Asian session, the Japanese currency was able to make a good rebound later on when risk aversion kicked in.

Earlier today, Japan release its core machinery orders report and its tertiary industry activity index. Core machinery orders were up by 5.4%, almost twice as much as the estimated 2.9% increase, while the tertiary industry activity index printed a 0.7% uptick.

Later on, Japan will hold its 30-year bond auction and release its consumer confidence report around 5:00 am GMT. Stay on your toes for more movement among the yen pairs then, as weak data could put yen bears in control once again.

What a bloodbath! Thanks to overall risk appetite and strong Nikkei performance, the yen plunged across the board. USD/JPY, EUR/JPY, and GBP/JPY all showed significant gains with USD/JPY closing above the 98.00 handle.

As I mentioned in my USD update, speculations of a US debt ceiling deal spread optimism in the markets. It also didn’t help the yen that Japan’s reports printed positively, which helped boost the Nikkei to close 1.12% higher.

Let’s see if the yen will end the week deep in the red. Japan won’t be releasing economic data today, so you might want to keep your eyes on Nikkei performance as well as risk appetite.

Good luck!

The yen was the biggest loser in the markets last Friday as traders lightened their yen exposure. Can you guess the factors that boosted USD/JPY, EUR/JPY, and GBP/JPY?

If you guessed strong equities markets then you better give yourself a pat on the back! Optimism for a debt ceiling deal in Washington propped up optimism for the Asian markets. The move was sustained in the later trading sessions especially since there were no major reports to encourage an intraday sentiment change.

Japan is out on a bank holiday as the Japanese celebrate Health-Sports Day but that doesn’t mean that the yen won’t get any action! Keep an eye out for any report that might affect risk sentiment, aight?

It was another sad day for the Japanese Yen as sentiment shifted late in Monday’s trading session on optimism of a US debt deal going through. It was a broad hit to the Yen, but with the US bank holiday and prevailing US government uncertainty, the volatility was limited. After gapping lower at the week open price of 98.15, USD/JPY ended the day up 41 pips at 98.56.

In an hour or so, Japanese data will hopefully spark some volatility with its final read on the monthly industrial production number, forecasted at -0.7% (inline with the previous read). We’ll also get the capacity utilization report which previously read at 3.7%. After those reports, price action will be dictated by broad risk sentiment, so be sure to stay focused on the big picture!

Looks like the yen won’t go down without a fight! The Japanese currency struggled to make gains against its major currency rivals, as GBP/JPY consolidated around the 157.50 area while AUD/JPY was unable to break past the 94.00 handle. Can the yen go for more gains?

The ongoing U.S. government shutdown and the lack of a decision on the debt ceiling kept risk aversion in the markets yesterday, lifting the lower-yielding yen in the process. There were no major reports released from Japan then and none are due today, which suggests that risk sentiment could dictate where the yen will be headed.

Take note that Prime Minister Abe just opened the parliamentary session whose agenda is to discuss the details of the next set of stimulus efforts. The session is scheduled to last until the first week of December so any announcements of aggressive easing measures until then might be negative for the yen. Stay on your toes!

The yen was the biggest loser yesterday as it lost pips against the dollar, euro, pound, and even the Aussie. How the heck did that happen when Japan didn’t even release any economic report?!

As I pointed out in my USD and GBP updates, risk appetite dominated the U.S. session trading as policymakers hinted at a deal that would re-open the U.S. federal government and extend the debt ceiling until early next year. The postponement of uncertainty was enough to spur on the currency bulls, who sold the low-yielding yen in favor of the higher-yielding currencies.

Japan won’t be releasing any report again today, so the yen will most likely trade on risk sentiment again. Be at the edge of your seats in case we see any more updates regarding the debt ceiling brouhaha, aight?

D’oh! The Japanese yen was extra clumsy in yesterday’s trading as it had trouble getting back on its feet. EUR/JPY, GBP/JPY, and AUD/JPY soared up the charts while USD/JPY spent a brief moment above the 99.00 mark before crashing below 98.00.

There were no reports released from Japan yesterday as risk sentiment was the primary driver of price action. Unfortunately for the lower-yielding yen, risk appetite surged yesterday when the U.S. passed a deal on extending the debt ceiling deadline and announced that the government shutdown was over. It did manage to score some gains against the U.S. dollar later on, when a Chinese rating agency reportedly downgraded U.S. debt.

There are no reports lined up for Japan today but BOJ Governor Kuroda has a speech scheduled sometime around the end of the Asian trading session. Watch out for potential volatility and possible profit-taking for the rest of the day! Good luck!

You win some, you lose some. The yen managed to hold off more losses from some of its major counterparts as Nikkei snaps its consecutive gains on profit-taking. USD/JPY, EUR/JPY, and GBP/JPY ended the day with dojis without hitting significant intraday highs and lows.

The yen started the day on a negative note as better-than-expected reports from China propped up risk appetite and the Nikkei and weighed on the low-yielding yen. The weakness didn’t last, however, thanks to a bout of profit-taking in the later trading sessions.

Let’s see if the yen will pick up its volatility again this week. Early today Japan printed its FIFTEENTH monthly trade deficit in a row, a record, as the annualized growth of imports (16.5%) outpaced exports (11.5%). With the yen falling by nearly 25% against the dollar since November, it’s not surprising that import costs have grown. Unfortunately, the exports demand hasn’t kept up yet.

Still, word around is that it is additional fuel demand following the shutdown of Japan’s nuclear plants that is propping up imports. Not only that, but domestic demand isn’t that bad either. This is probably why Nikkei is reacting positively to the report, which is weighing on the yen a little in early Asian trading.

The next report we’ll see today is the all industries data at 4:30 am GMT. The report doesn’t usually have a significant impact on the yen, so you might want to keep an eye out for news that might affect risk sentiment instead.

When risk is on, yen bears are out to play! The Japanese currency lost ground to its higher-yielding counterparts, as AUD/JPY climbed a few pips close to the 95.00 handle while USD/JPY bounced back above the 98.00 handle. Is the yen in for more losses?

As it turns out, the recent run in risk appetite was enough to push Japanese equities higher in yesterday’s Asian trading session. The Nikkei chalked up nearly 1% in gains, leading to a selloff in the negatively correlated Japanese yen.

As for economic data, there were no major releases from Japan yesterday and there are no reports lined up for today. With that, better keep close tabs on market sentiment throughout the day, particularly during the U.S. session when the September non-farm payrolls figure will be released. Good luck!

You win some, you lose… a lot? Although USD/JPY slipped lower yesterday, it didn’t make up for the huge jumps that we saw in yes crosses like EUR/JPY, GBP/JPY, and AUD/JPY.

Japan didn’t print any economic data yesterday, so the yen’s weakness could be attributed to the overall risk appetite that followed a weak U.S. NFP report during the U.S. session. Check out my USD update if you wanna know the deets on that!

The Land of the Rising Sun isn’t scheduled to print anything today either, so keep your eyes on Nikkei and the overall risk sentiment for clues on where the yen is headed!

Out of the way! Yen bulls charging! The Japanese currency received a strong boost from risk aversion and updates from China in yesterday’s Tokyo session, pushing USD/JPY below the 97.50 handle and EUR/JPY to a low of 133.60. Can the yen keep up its rallies today?

During yesterday’s Asian session, the lower-yielding Japanese yen was able to take advantage of the risk-off sentiment spurred by China’s surging money market rates. Apparently, this reminded traders that the Chinese central bank stopped adding stimulus earlier this month, which meant low liquidity and a potential downturn in growth. This was enough to give traders the goosebumps and force them to flee to safe havens!

There were no reports released from Japan then and there are no reports lined up for today, which suggests that yen trading could depend on risk sentiment once again. Stay on your toes for any updates from China and keep a close eye on Asian equity markets if you can!

Much like the Greenback, the low-yielding yen gained on the comdolls but lost out to the European currencies. USD/JPY and AUD/JPY slipped by a couple more pips but EUR/JPY and GBP/JPY managed to end the day in the green.

We didn’t see any economic data from Japan yesterday, so the yen most likely traded on risk sentiment instead. Let’s see if that will be the case again today when traders react to Japan’s inflation numbers.

A few hours ago we saw Tokyo’s CPI come in at 0.3%, which is a bit lower than the expected 0.4% uptick. Even Japan’s CPI reading came in at 0.7%, slightly lower than last month’s increase. No other data is scheduled for release today, so pay attention to any news that might affect risk appetite!

The yen sure knows how to have a good time on a Friday! The Japanese currency edged higher against its major counterparts, particularly the Aussie and the Loonie, then consolidated against the U.S. dollar and the pound. What’s up with these weekend gaps among yen pairs though?

Thanks to the drop in Japanese equities, the Japanese yen was able to extend its rallies before the week came to a close. Apparently, traders are still uneasy about the rise in Chinese money market rates so they decided to dump their higher-yielding equity holdings in exchange for safer and lower-yielding assets. As for Japanese data, inflation reports came in mixed, with the Tokyo core CPI posting a weaker than expected reading of 0.3% and the national core CPI figure showing a 0.7% increase in price levels.

There are no reports due from Japan today so it could be all about market sentiment for the yen! Make sure you stay tuned for any updates on the Nikkei and Asian stock markets to figure out if yen pairs are in for another round of selling. Good luck!

Another one bites the dust! Thanks to a slight risk aversion in the markets, the yen crosses ended the day in the red. USD/JPY gave the best fight with only a 3-pip loss but EUR/JPY, GBP/JPY, and AUD/JPY weren’t as lucky with their 20-pip or so losses.

Japan didn’t print any news report and Nikkei had a pretty okay day yesterday, but that didn’t stop the yen crosses from falling. As it turned out, a day of thin trading for the major currencies wasn’t good for the high-yielding currencies.

A few hours ago Japan’s annualized retail sales report showed a 3.1% gain for the month of September, which is better than the 1.9% gain that many had been expecting. The 3.7% uptick in household spending was also a boon, especially since analysts had only been expecting a 0.7% increase. Will these reports change the tides for the yen crosses? Watch your yen trades closely!

Why, thank you risk aversion! The yen was able to edge a little higher than its major counterparts in yesterday’s trading, as EUR/JPY retreated to a low of 134.34 while AUD/JPY fell below the 93.00 handle. Can the yen keep up its gains?

Japan printed better than expected economic figures yesterday, as both household spending and retail sales increased much more than projected. This was enough to provide a bit of support for the Japanese currency during the Asian session but what really boosted the yen’s spirits was the run in risk aversion which happened after the U.S. economy printed disappointing data.

Earlier today, Japan released a weaker than expected industrial production figure of 1.5%, lower than the estimated 1.8% rise. On top of that, the previous period’s reading was revised lower to show a 0.9% decline. No other reports are due from the Japanese economy today so yen trading could be sensitive to market sentiment.

Down for another day! The low-yielding yen weakened across the board on an improvement in the Asian markets. USD/JPY reached the 98.50 area while EUR/JPY popped up by 50 pips.

Too bad that Japan’s better-than-expected reports aren’t helping the yen. In fact, it’s helping the Japanese stocks, which takes the bulls’ attention away from the low-yielding currency.

The BOJ is up today with its monetary policy decision! Analysts expect the central bank to upgrade its growth forecasts and hint at more stimulus to fight deflation. We can’t discount surprises though, so keep close tabs on your yen crosses in case we see extra volatility!

Saddle up, yen traders, the bulls are charging! The Japanese currency advanced by roughly 200 pips against the euro, as EUR/JPY tumbled from the 135.00 area to 133.00. GBP/JPY chalked up a smaller decline, as it found resistance around 158.00 but bounced from a low of 157.28.

The BOJ keep monetary policy unchanged in yesterday’s interest rate statement but announced upgrades for its growth forecasts. They are expecting to see 1.5% growth next year, higher than their previous 1.3% estimate. For 2015, they kept their GDP estimate unchanged at 1.5%. As for inflation, they kept their forecasts unchanged for the next couple of years.

There are no reports due from Japan today, which means that the yen might be driven by risk flows. Do watch out for potential profit-taking ahead of the weekend, too!