Daily Economic Commentary: Japan

With risk appetite back in play, the yen took a small hit to end the week. EUR/JPY hit as high as 109.84 before finally settling at 109.26, 31 pips above its opening price.

Some profit taking as well as whispers that the People’s Bank of China would be lowering its RRR fuelled higher yielding currencies. Remember, the markets have been extra sensitive to Chinese news lately, so it’s important to be on the lookout for any rumblings out of China.

No major data coming out from Japan until Wednesday, when retail sales figures are due. For now, keep an eye out for shifts in risk sentiment, as has been the major driver in the market lately. Keep an eye out on the equities and commodities markets as it could reveal to us what the big boys are feeling!

The Japanese yen edged lower across the board yesterday as a bit of risk appetite managed to make its way to the market. By the end of the U.S. trading session, the currency was 39 pips lower versus the dollar and 126 pips lower against the euro.

No major news report was released in Japan yesterday and none again are scheduled to be published today. This means that the yen will most likely be driven by data from other major economies such as those from the U.S. and the euro.

In its usual fashion, the yen’s price action was as mixed as the colors of M&Ms yesterday on a lack of major data from Japan. The yen lost against the dollar, franc, euro, and pound, but it gained against the comdolls. What gives?

Only the Corporate Services Price Index report was released yesterday, and the data revealed price of services paid by corporations fell by another 0.6% in January after slipping by 0.4% in December.

Maybe it was a good thing then, that investors’ attention were focused on risk sentiment in markets. Mixed data from the other major economies made risk sentiment choppy though, so you might want to wait for more confirmation on the yen’s direction before you commit to a trade.

No data is scheduled for release in Japan today, so watch your screens closely for any major announcements that might shift risk sentiment!

Aaah, there’s nothin’ like risk aversion to get the yen’s inner sumo wrestler on. The Asian currency strengthened against all of its major counterparts, gaining 33 pips from the dollar, 44 pips from the euro, and 96 pips from the pound.

Risk aversion stemming from skepticism about whether or not European officials will in fact increase the capacity of the ESM and EFSF, as well as repatriation flows to Japan boosted the yen in yesterday’s trading. I have a feeling these factors will remain to be play today as well. But to make things even better for yen bulls, they also have the better-than-expected retail sales report from Japan to support their yen-longs.

It was reported that consumer spending grew by 3.5% in February, more than double the 1.4% forecast!

Then again, that’s just my two cents. Be sure you keep tabs on market sentiment and remember that the currency usually rally in times of risk aversion.

As though the yen’s losses on Friday weren’t bad enough, yen pairs even gapped higher over the weekend after Japan released a few weak reports. USD/JPY opened 4 pips up from the 83.00 handle while GBP/JPY started the week at 133.05. Is the Japanese yen in for more losses this week?

Over the weekend, Japan printed its Tankan manufacturing index which came in much weaker than expected. The reading was expected to improve from -4 to 0 for the first quarter of the year but it remained at the -4 mark, showing that there wasn’t any improvement in the industry during the period. The non-manufacturing component, on the other hand, came in as expected and climbed from 4 to 5.

There are no other top-tier reports due from Japan this week, which means that the Japanese yen would have to take its cue from other big releases such as the U.S. NFP report. Make sure you keep close tabs on risk sentiment as well because this could determine whether the yen pairs would continue their ascent or not.

The yen turned in a magnificent performance in yesterday’s trading session as it gained a lot of ground against most major currencies. It gained 158 pips over the euro, 103 pips over the dollar, and 147 pips over the pound.

The yen was able to rally despite weak data. The Tankan Manufacturing Index printed a reading of -4, which is much lower than the 0 reading initially predicted. The Tankan None-Manufacturing Index, on the other hand, came in line with expectations with a reading of 5.

Earlier today, the yen received a bit of good news. The average cash earnings report came in with a 9.7% increase, much higher than both forecast and the previous month’s figure. This helped the yen stage another small rally.

The yen wasn’t able to follow up on its gains yesterday as a bullish FOMC minutes decreased appetite for low-yielding currencies. USD/JPY shot up by 76 pips to 82.82, while GBP/JPY also closed at 131.81 after hitting an intraday low of 130.78.

Too bad that mixed economic reports from Japan weren’t any help for the yen. Japan’s liquidity supply dropped for the first time in three years in March, which fueled discussions that the BOJ should do more to end the country’s deflation. Meanwhile, average cash earnings rose by 0.7% in February compared to a year earlier, its first rise in seven months.

No economic data is scheduled for release in the Land of the Rising Sun today, but keep an eye out for any economic report that might shift the demand for low-yielding currencies!

The yen was one of the biggest benificiaries of the dollar’s demise last Friday as it gained against all of its major counterparts. Is was downright beastin’, man! It gained 87 pips against both the dollar and the euro as USD/JPY greeted the weekend at 81.54 and EUR/JPY finished at 106.80.

The only thing Japan published last Friday was the February leading indicators report. Luckily, it printed an upside surprise! The index printed a reading of 96.6%, a full percentage point above forecasts. This prompted the Cabinet Office to upgrade its overall assessment of the economy and say that the report “shows that the economy is improving.” Booyeah!

Likewise, the current account report, which was released just hours ago, came in better-than-expected as well. Japan’s surplus grew from 0.14 trillion JPY to 0.85 trillion JPY, well above the expected 0.66 trillion JPY figure.

If you’re looking for Japanese events to trade this week, then you better tune in tomorrow when the Bank of Japan makes its rate decision. Though I don’t expect to see any changes in interest rates, I will be listening closely for further signs of easing and more clues as to what the central bank plans to do about the yen. Good luck and happy pipping, folks!

Seems like the yen bulls can only go for three! The yen finally snapped its 3-day winning streak against other major currencies yesterday as traders came back from their long weekend. USD/JPY, for instance, closed the U.S. trading session with a small 11-pip win.

The positive economic reports from Japan were unable to give the yen a boost. The current account balance showed an 850 billion JPY surplus, much higher than the 660 billion JPY surplus initially expected. Meanwhile, the economy watchers sentiment survey printed a reading of 51.8, better than both the 46.6 forecast and the previous month’s 45.9.

Today will be a big day for the yen as the Bank of Japan (BOJ) will announce its decision on interest rates. The market widely expects the central bank to keep rates below 0.10%, so the accompanying statement will be the one to watch out for here. If the bank decides to inject another round of stimulus to the economy, then we could see the yen experience another sharp sell-off. Stay tuned folks!

Yesterday’s risk averse environment combined with the Bank of Japan’s decision to keep its monetary policy unchanged to provide perfect conditions for a yen rally. With traders going gaga over the Japanese currency, USD/JPY dropped almost 100 pips to 80.66 while EUR/JPY plummeted about 150 pips to 105.51. It seems like the yen’s bull run ain’t over yet after all!

What a rally!!! The yen was unstoppable yesterday! But then again, why should we be surprised? Risk was off on renewed turmoil in Spanish and Italian bond markets, and as a safe haven currency, the yen found itself on the receiving end of all the pips. It was like the Andre Johnson of the forex world yo!

Furthermore, the Bank of Japan’s decision to keep interest rates untouched helped stoke demand for its currency as well. Though most analysts anticipated the move, there were some traders who priced in the possibility of a monetary policy adjustment. After all, the BOJ has been on the dovish side as of late. These traders must’ve been disappointed when they heard that the central bank decided to sit on its hands!

Overall, the BOJ believes that the economy is picking up steam, but it’s still relatively flat at the moment. The outlook doesn’t seem so bad either, as policymakers see the economy returning to a moderate recovery path.

Since you and I are good buddies, I think I ought to let you in on the latest rumors. Word on the street is that since the BOJ didn’t do anything this time around, there’s a good chance it’ll consider further easing at its April 27 meeting!

In other news, the core machinery orders report printed above expectations by showing a 4.8% increase versus forecasts for a 1.8% decline. More fuel for the yen’s rally, perhaps?

The next bit of data won’t come out until 5:00 am GMT, when the BOJ monthly report is due. If you wanna know more about what’s on the mind of Japanese policymakers, I suggest you check this out!

After Tuesdays steep drop, Bank of Japan officials probably released a sigh of relief when they saw yen crosses trade higher yesterday. EUR/JPY backed off its lows and finished just above the 106.00 handle, while GBP/JPY finished 70 pips higher at 128.70.

The markets basically ignored mixed results from European bond auctions, which helped trigger a rally in the yen crosses. This was certainly good news for the BOJ, reiterated time and again how it wants the yen to weaken in order to help Japanese export companies.

No big data lined up for today, but keep an eye out on risk sentiment, as this will probably be the major driver of price action today. Do watch out at 11:50 pm GMT, as minutes of the latest monetary policy meeting will be available. The report will probably indicate that BOJ officials were probably more open to adding to its asset purchase program and that the central bank will probably do so at its next meeting on April 27.

Make that three in a row! The Japanese yen chalked up its third day of consecutive losses against its major counterparts as risk appetite improved in the markets yesterday. EUR/JPY ended the day at 106.64 while GBP/JPY closed 7 pips above the 129.00 handle. Will the yen continue its losing streak until the end of this week?

Japan didn’t release any economic figures yesterday but the risk rallies were enough to trample on the Japanese yen. Add to that the fact that the BOJ and Japanese Ministry of Finance seem to be considering further stimulus for the Japanese economy as well as moves to curb the yen’s strength, and we’ve got a 1-2-combo enough to knock the yen off its feet!

Japan’s economic calendar is empty for today, which means that the yen could be affected by risk flows yet again. Bear in mind that the U.S. is set to release a few top-tier reports later on, so make sure you check out my U.S. economic commentary to figure out where risk sentiment could be headed!

With risk aversion taking over the markets, it was a great day to be a yen bull. The yen gained 70 pips against the euro and pound, leaving EUR/JPY and GBP/JPY to finish at 105.94 and 128.38 respectively.

With the spotlight shifting its focus back on the euro zone, the problems of Spain were in full display. Bond yields and CDS spreads both continue to rise, highlighting concerns that Spain may be next in line for a bailout. And of course, the mere mention of another bailout helps support the yen, which tends to benefit in times of risk aversion.

No biggies on tap over the next few days, but that doesn’t mean we won’t see any action on the yen. Keep an eye out for shifts in risk sentiment, as this will probably have the biggest influence on the markets this whole week.

The yen ain’t no Mick Jagger but with the swag it displayed on the charts yesterday, we might as well nickname it Mick! It rallied against all of its major counterparts, gaining 44 pips from the dollar, 32 pips from the pound, and 3 pips from the euro.

There wasn’t any market-moving event that could’ve tilted conditions to the yen’s favor. This leads many to believe that the Asian currency’s gains yesterday could be because investors are still feeling jittery about the global economy. Heck, with reports about slowing growth in China, rising bond yields in Europe, and fragile recovery in the U.S., who wouldn’t be concerned, right??

Our forex calendar is once again blank for top-tier reports from Japan today and this probably means that the yen’s price action will be dictated by market sentiment for the most part. So be sure you gauge it before you decide to play the currency! Keep in mind that it usually rallies when risk aversion is in play and gets sold-off when risk appetite is up. Good luck!

The Bank of Japan must’ve breathed a sigh of relief when they saw the way the yen sold off yesterday! It weakened against ALL of its major counterparts! For instance, USD/JPY rallied 45 pips to 80.89 while EUR/JPY climbed 50 pips to 106.18.

Risk taking was the name of the game yesterday, and unfortunately, that’s not a game the yen excels at! Widely considered a “safe have” currency, the yen tends to gain in times when risk appetite is low. Consequently, it tends to weaken when markets are risk-hungry!

Today, we’ve got a couple of events in Japan that are worth a look, but you gotta stay up late to catch 'em!

First up is BOJ Governor Shirakawa’s speech at 10:30 pm GMT. The yen may weaken further if he makes remarks about the need for further easing or if he comments on the yen’s strength, so listen closely to what he has to say!

Then at 11:50 pm GMT, the monthly trade balance report will be available. Look for Japan’s trade deficit to widen from 0.31 to 0.43 trillion JPY.

Ah hah! It looks like the yen failed to tap its inner Samurai warrior in yesterday’s trading. It lost to almost all of its counterparts, giving up 38 pips to the euro, 36 pips to the dollar, and a whopping 128 pips to the pound.

Market junkies think that traders felt nervous buying the yen ahead of the release of Japan’s trade balance report. And it looks like their worry was warranted!

It was reported that the country’s trade deficit widened to 620 billion JPY in March. That’s almost twice the 320 billion JPY deficit that we saw in February! On top of that, the consensus was for imports to outpace exports only by 440 billion JPY.

Some market junkies think that the figure could weigh on the yen’s performance at least in the next couple of days. Remember that the BOJ has warned that it could implement more easing measures if necessary. And so, the disappointing trade data may just give the central bank one more reason to launch more stimulus which could weaken the yen.

You may want to keep that in mind in today’s trading. Be careful, ayt? Peace!

Uh oh… For the third straight day, the yen bears put the hurt on the yen bulls. USD/JPY, for instance, climbed to 81.58 after it had opened the Asian trading session at 81.25.

It seems that the yen’s losses over the past few days was the result of the market pricing in their expectations for further easing. Many analysts expect the BOJ to take on additional quantitative easing measures next week like as increasing the asset-purchase program by around 60 to 130 billion USD and buying bonds with longer maturities.

No major news report coming out from Japan today, but with the market expecting the BOJ to inject more money into the economy, we could see the yen give up more ground before the market closes for the weekend.

With the markets focused on grabbing all the higher yielding currencies it could to satisfy its risk appetite, the yen was left out to dry last Friday. EUR/JPY rose 60 pips to finish at 107.75, while GBP/JPY climbed up to 131.48, marking a 49-pip gain on the day.

Nothing lined up from Japan today, but check out my euro zone commentary for more details about the upcoming German and French manufacturing and service PMIs coming out during the London session. This could dictate risk sentiment today, so watch out homies!

In a surprising turn of events, the yen was able to stage a stellar rally against other major currencies yesterday. USD/JPY, for instance, closed the day at 81.16, 42 pips lower from its opening price during the Asian trading session.

Yen buying spun out of control once news of political instability in Holland hit the markets. Apparently, the one of the coalition partners in the Netherlands resigned due to argument over the austerity budget. This resulted in a wide-reaching case of risk aversion as the country’s political problems could negatively affect the country’s credit rating.

No red flags on Japan’s forex calendar today, so we could see the yen continue its move from yesterday unless something new comes up. Keep your eyes peeled folks as market sentiment can shift any time!

When the market bees start buzzing for more quantitative easing from the BOJ, you can bet your neighbor’s cat that the yen traders will take action! Thanks in part to rumors of more QE from the central bank, EUR/JPY rose by 47 pips to 107.21 while USD/JPY shot from its 80.85 intraday low to close at 81.29.

No major economic report was released from the Land of the Rising Sun yesterday, but rumors that the BOJ would increase its asset purchases by 5 to 10 trillion JPY (instead of just 5 trillion JPY) and adjust the maturities of its government bonds to around three years was enough to spur the currency bears into selling the yen.

Remember that in February the BOJ adapted a 1% inflation rate target. Unfortunately, many believe that the central bank won’t meet its target without more help from the BOJ.

The data tank from Japan will be void of major economic reports again today, but watch the newswires closely in case we hear more from the central bank regarding its asset purchases, aight?