US stocks continue to be extremely volatile with the Dow down as much as 220 points intraday before reversing those losses to end down only 33 points. Unsurprisingly this led to equally volatile price action in the Japanese Yen crosses, which are all up on the day with the exception of AUDJPY and CADJPY.
Last night’s Japanese economic data was mixed and provided little direction for the Japanese Yen. Tonight we have the Eco Watchers survey and unfortunately the man on the street probably sees more difficult times ahead. Although Japanese corporations are reporting stronger profits and Tokyo is booming, economic activity outside of the capital teeters on recession. Wage growth remains low, forcing the Bank of Japan to keep interest rates on hold for the foreseeable future.