Trading on the USDJPY was as tight as an authentic sushi roll, as the pair traded within a tight 50 pip range! Meanwhile, the yen fell against the euro and pound, indicating that risk sentiment is still driving the yen.
Rumors out of China are that with recent economic data showing strong figures, the People’s Bank of China may just make more moves to curb growth. In the past couple of months, the PBOC has made moves aimed at slowing down China’s growth in order to a sharp rise in inflation. Take note that China is a major importer of Japanese goods - if demand from China starts to falter, it will have a significant effect on the export driven Japanese economy. I’m going to keep my eye out on this issue and I’ll be sure to update you on it!
Nothing major shipping out of Tokyo today, but that doesn’t mean you can sit back, relax and go skiing on Mt. Fuji! We’ve got retail sales data coming out from the US tonight which might just snap the USDJPY out of its lull.
After losing ground to its major counterparts, would the Japanese yen suffer another round of weakness this week? I have a nasty feeling that something else other than risk appetite is weighing the yen down.
It turns out that currency intervention could be in the works for Japan. First, Prime Minister Yukio Hatoyama is growing concerned over the yen’s appreciation. He was quoted saying that the government might need to take measures to curb yen strength. Second, Finance Minister Naoto Kan quipped that he is open to the option of currency intervention. Wednesday’s BoJ monetary policy meeting could shed more light on this matter.
Today we’ll take a look at Japan’s household confidence index, which could rise from 39.0 to 40.6 in February. The index has been climbing since December last year and another uptick could provide support for the yen.
On Tuesday, the tertiary industry activity index will be released. This could print a 1.3% increase in the total value of services purchased by businesses for January, a rebound from the 0.9% decline seen in December.
As I mentioned above, the BOJ monetary policy statement will be released on Wednesday. The central bank is widely expected to keep rates at their current 0.1% level although there have been talks of additional easing measures. Better keep an eye out for that since more easing could pull the yen down.
Japan’s last economic report for the week will be the BSI manufacturing index due Wednesday 11:50 pm GMT. The index could climb from 13.2 to 15.3 for the first quarter of 2010, indicating that manufacturers included in the survey are more optimistic with business conditions.
Yowza! It was a great day indeed for the Yen bulls yesterday as the JPY staged a broad-based rally against all the other majors. The question now is… Does the Yen have enough juice to extend its win to round 2 today?
Japan’s latest household confidence index rose to 39.8 from 39.0 as the country’s labor market appears to have been showing signs of improvements. Still, the latest tally was weaker than the 40.6 estimate. The Yen lost a bit of support following the report.
The Yen, however, regained a lot ground during the start of the London session as the UK’s debt issues surfaced once again. At present, the UK is at risk of losing its AAA rating. As fears mounted, investors run back to the ‘safer’ currencies like the Yen.
Presently, the Yen is strengthening ahead of the 2-day BOJ monetary policy meeting, which will start later at 4:00 am GMT, and the Fed’s interest rate decision at 6:15 pm GMT. While both the BOJ and the Fed are expected to keep their interest rates they are, any hawkish statement by any of the two committees could be bullish for the Yen.
The yen was unable to keep up with the Western currencies yesterday. The currency lost its appeal to currency traders and got sold-off against the dollar, the euro and the pound.
Earlier today, Japan released its tertiary industry activity report for the month of February. The report basically measures the change in the total value of services rendered to businesses. It showed an increase of 2.9%, more than twice the increase initially expected. It was also opposite the 0.9% decline seen in January.
For today, the focus of traders will turn to the interest rate decision of the Bank of Japan. Although it is widely expected that the BOJ would keep rates unchanged at 0.10%, the bank has shown concern on the yen’s rising value. There was rumor going around last week that the BOJ could intervene in the markets soon and try to push down the yen’s value. Remember, Japan is highly export-dependent, and an appreciation of its currency makes its exports more expensive to foreigners. If the bank talks about intervention later, we could see the yen suffer another round of losses.
The USDJPY has been stuck in range for over a week now, as the pair didn’t move from its opening price. Could we be in line for a big move soon?
The big news that came out of Japan yesterday was that the Bank of Japan doubled the size of their special lending program from ¥10 trillion to ¥20 trillion. This move was made despite the fact that BOJ upgraded its outlook on the economy for the first time since mid 2009. Some suggest that the expansion of the program was made to appease the demands of the Ministry of Finance that the BOJ fight off deflation through the use of monetary policy.
Remember, central banks increase money supply in order to stimulate the economy, which in turn should lead to a rise in consumer prices down the line. The BOJ is hoping that by providing more liquidity to the markets, this will spark inflation, which would help ease the current state of deflation that the country is going through.
With even more stimulus being added to the economy, could we see the yen drop against other majors? The initial price reaction in the USDJPY suggests not quite, but lets see how this plays out over the next couple of weeks.
Today, the BOJ monthly report is due at 5:00 am GMT. It’ll probably provide information as to why BOJ officials believe that expanding the special lending program will help the economy.
Although the yen was able to strengthen against the pound and the euro yesterday, it was unable to bust out of its range-bound movement with the greenback. In fact, the USDJPY has been bouncing between the 90.00 area and the 90.75 level for this entire week!
Japan didn’t release any economic reports yesterday, leaving the yen little changed against the US dollar and Australian dollar. Today, Japan is set to release its all industries activity index at 4:30 am GMT. An increase of 1.6% is expected for the month of January, a nice rebound over the 0.3% decline seen in December. Besides, the tertiary activity index, which was released earlier this week chalked up a surprise 2.9% increase over the expected 1.3% climb. Could another upside surprise be seen for today’s all industry activity index? Stay tuned!
The Yen staged a rally last Friday against all the other majors except the dollar to close the week on a positive note. Will risk aversion surface this week to put the Yen back on the radar? We’ll have to wait and see.
Japan’s all industries activity index came in a lot higher than expected. The index rose by 3.8%, which is more than two folds of the market’s 1.6% estimate, in January. Among the index’s components, the one that rose the most was Japan’s construction sector which jumped by a whopping 17.3% following a very marginal 0.1% rise in December. The yen gained some support following the report.
This week will kick off with the release of the BOJ’s monetary policy meeting minutes today at 11:50 pm GMT. The BOJ recently doubled its quantitative easing program to ¥20 trillion ($222 billion) while holding its interest rate at a low of 0.10%. Prices are still falling in Japan at an annualized 1.8% decline in January. With the Japanese government restrained from doing more spending because of its huge debt, the pressure now is on the BOJ to do something to shore up the economy. Some economists, however, believe that the bank’s recent move will only have a minimal impact on the economy.
On Wednesday, Japan’s trade balance for the month of February will be reported. The country’s trade surplus is seen to have narrowed to ¥0.41 trillion from ¥0.73 trillion. Any decline here could further weigh on the JPY.
Japan will conclude the week with the release of the March Tokyo core CPI and the February national core CPI. Prices in Tokyo, which is Japan’s most populated city, are projected to have declined by 1.7% on an annualized basis in March. The national version of the account for February also shows a slight improvement in the change (drop) in prices. The national CPI is expected to be at -1.2% from -1.3%.
Supported by a wave of risk aversion, the yen found itself winning out against other major currencies early yesterday. The rally proved to be short lived though, as the yen erased most of its gains once the US afternoon trading session went underway.
No data was released yesterday since Japan banks were on holiday but earlier today, the BOJ’s monetary policy meeting minutes for the month of February came out. The minutes revealed that the bank, while deciding to keep rates unchanged, believes that it would have a difficult time finding a solution for falling prices.
As of the moment, deflation remains as one of Japan’s biggest problems. Despite setting rates at its lowest at 0.1% and injecting a large amount of money into the economy, businesses and consumers refuse to spend, which is pushing prices down further. It looks like the BOJ is all out of moves, and has no choice but to let things just play out…
On the docket today, at 11:50 pm GMT, is Japan’s trade balance. The trade balance measures the net difference in value between exported and imported goods of the country. A positive balance is also called a surplus, which means that more goods were exported than imported. The expectation is a 41 billion yen surplus for February, significantly lower than the 73 billion yen surplus in January.
While the USDJPY remained in range for the 12th day in a row, the yen remained mixed against other currencies. The yen fell against the Australian dollar, but posted some gains against the euro and pound. What could be in store for us today?
Trade balance figures were released late yesterday, coming out slightly better than expected. Japan hit a surplus of ¥470 billion last month, just beating predictions of a ¥410 billion figure. This indicates that more goods were exported than imported. Take note however, that January’s surplus was revised down from ¥710 billion to ¥650 billion.
Lately, the yen’s moves have been based on sentiment in other currencies. European currencies like the euro and pound have been falling against the yen as traders as they have been plagued by issues here and there. With no high impact data on deck today, watch out for strong moves in other currencies to direct the yen’s movement.
Kamikaze! The Japanese yen dove sharply against the US dollar yesterday as risk aversion revisited the markets. As a result, the USDJPY broke out of its range and rallied to a high of 92.40 during the US session.
Despite the weak economic figures from the US and the strong trade balance from Japan, the US dollar proved to be the more preferred lower-yielding currency yesterday. Risk aversion, which resulted from Portugal’s debt rating downgrade, pushed the safe-haven US dollar higher against the yen. Meanwhile, gains of the yen crosses were a bit more contained.
Only the corporate services price index was released from Japan yesterday. It printed a worse than expected annualized decline of 1.3% for February, highlighting the threat of deflation in the Asian economy.
Today, Japan will release the Tokyo core CPI and the national core CPI. Another round of year-over-year declines are expected for the month of February, with the Tokyo core CPI falling by 1.7% and the national core CPI dropping by 1.2%. This could push the yen to take another kamikaze dive today. Brace yourselves!
Nothing went right for the JPY yesterday as it went through another broad-based beating. The only people who were partying were the yen-bears. Will we see another round of yen whipping today or will the bears cash in their profits to end the month?
Yesterday, Japan released its Tokyo and national CPI figures. Tokyo, which is the most populated city in Japan, registered a worse-than-expected inflation number. March’s Tokyo CPI remained at -1.8% versus the markte’s estimate of -1.7%. February’s national CPI, however, recovered somewhat to -1.2% in February from -1.3%. In any case, Japan remains to be deep in deflation.
Some economists project that Japan will stay in a deflationary environment until 2013. Let’s see if the recent move of the BOJ to double its lending program could spark domestic consumption in the months ahead.
If you want to learn more about Japan’s present situation, my friend, Forex Gump, wrote an article about it yesterday. Kindly check it here.
Japan’s economic calendar is report-free today. Since it is the end of the month, the JPY short sellers could cover their positions and cash in their profits.
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.
Yen crosses took some hits in yesterdays trading rounds, as higher yielders benefited from a run of risk appetite. The EURJPY and GBJPY both saw themselves floating slightly higher. Could we see the same today? Or will the yen strike back?
Japan was hit with some poor economic data yesterday, as both the household spending and industrial production reports came in worse than expected. Household spending fell by 0.5%, after it was expected to have risen by 1.5%. Meanwhile, industrial production fell by 0.9% - consensus was for a decline of just 0.5%.
The labor market got some good news… well, good news in the sense that the unemployment rate didn’t go up! The jobless rate remained at 4.9%, which was in line with expectations.
No biggies coming out of Japan today, but that doesn’t mean you shouldn’t be on the lookout for data coming out from other counties! Watch out for shifts in risk sentiment, as this has been what’s driving the yen as of late.
The Japanese yen wasn’t in such a good mood yesterday as it fell against most of its counterparts, except for the euro. It seems like the yen still hasn’t moved on from the brunt of weak economic figures released earlier this week.
Only the manufacturing PMI was released from Japan yesterday. The report showed that the industry continues to expand as the reading stayed above the 50.0 mark. Still, the March manufacturing PMI dipped to 52.4 from 52.5 in February, implying that the expansion was slower during the month.
Does this mean that weak Tankan figures are in the cards? The Tankan survey, which is due 11:50 pm GMT today, could show that manufacturing and non-manufacturing conditions remained weak for the first quarter of the year. Although the readings are expected to stay in the negative zone, both the manufacturing and services component of the survey are expected to show that business conditions are worsening at a slower pace this time around.
My buddy Forex Gump has an interesting blow-by-blow analysis concerning the possible results of the Tankan survey, saying that weaker than expected figures could push the USDJPY above the 93.00 handle. Keep an eye out for that!
Risk appetite in the forex market drove the yen back on the sidelines yesterday. The yen slipped flat on its face against all of the other major currencies. Will it be able to recover some of its losses today? We’ll see.
Japan’s Tankan manufacturing index for the first quarter of 2010 improved to -14 from -24. The non-manufacturing version of the account also improved to -14, which is slightly better than the -15 consensus, from -22. A negative reading indicates a deteriorating condition in the sector. Despite this, the yen still managed to gain some support soon after the results were released because of a better than expected tally in Japan’s service sector. However, traders just took this as an opportunity to get a better price to sell the yen again. The yen continued to drop after due to the persistence of risk appetite in the market.
Later, BOJ Governor Masaaki Shirakawa will deliver a speech at the Bank of Japan. Any dovish statement there could send the yen lower. I doubt, however, that he would drop any hints regarding the bank’s future monetary policies since he will be speaking at a welcoming ceremony of new bank employees. Still, be on your toes!
The yen proved to be the biggest loser in last week’s trading sessions, falling in value against most major currencies. It looks like improving risk appetite will continue to put downward pressure on the yen’s value.
The only high-profile economic news to watch out for this week from Japan is the BOJ’s interest rate decision. It is widely expected for the BOJ to keep the benchmark interest rate unchanged at 0.10%, so the focus of traders would probably fall on the accompanying statement. If the bank decides to expand its quantitative easing program, then we could see the yen experience further losses. The BOJ will announce its decision on Wednesday.
For the first time in a week, the yen was able to slice the dollar like a sushi roll, as it posted some decent gains. Some see this as a technical correction given the strong upmove we have seen the past couple of weeks. Could this be an opportunity for traders to get in at a cheaper price?
No biggies coming out today, so watch out for news coming out from other countries. If risk appetite that was triggered from last week’s NFP report finally follows through, the yen may just give back its gains from yesterday.
Tomorrow should be more exciting, as the Bank of Japan will be making its interest rate statement. Remember, in its last monthly meeting, the central bank decided to expand quantitative easing measures. This month, traders will be waiting to see how upbeat the bank will be in their statement. If BOJ officials show more optimism and actually crack a smile or two, it may just give the yen more support.
The yen managed to squeeze some gains off the greenback, euro, and pound ahead of the release of the BOJ’s monetary policy statement. Strong economic figures also provided a boost for the yen, which closed at 93.89 against the greenback.
Japan’s composite set of leading indicators stepped up from 96.9% to 97.9% in February, marking its longest streak of gains since 1997. Whee! The recent improvement in Japan’s broadest measure of economic performance was led by a recovery in export demand. Components of the report showed that the surge in exports is starting to trickle down to employment and consumer spending, boosting Japan’s overall economy. Maybe this could lead the central bank to upgrade their growth forecasts for the year…
The BOJ has yet to release their monetary policy statement and hold a press conference probably later today. Keep an eye out for upbeat comments from central bank officials, which could allow the yen to push for more gains. Even though the BOJ is widely expected to keep rates at 0.1%, if they end up delivering a more bullish statement than the US Fed’s skeptical one yesterday, the USDJPY could make a mad dash for the 93.00 handle.
The yen dominated the FX market yesterday, banking a landslide win against ALL the other major currencies. Will the yen be able to extend its run?
Yesterday, the Bank of Japan kept its interest rate unchanged at 0.10% but also stated that the economy is already picking up. The improvements in the economy was said to have been due to the positive developments in some of its major trading partners. Domestic demand in Japan, however, is still fragile which places some pressure on the BOJ to hold its monetary easing policies.
Across the Pacific, the US consumer credit showed an unexpected drop of -$11.5 billion in February. A slide in credit indicates that consumer demand is not yet stable. Risk aversion, as a result, intensified which led investors back to the safety of the greenback and the yen.
Japan’s February core machinery orders also slid by 5.4% after already losing by 3.7% during the month prior. A drop here suggests that firms weren’t spending for capital expansions despite the increase in Japan’s exports. And soon after the result was released, the yen lost some support.
Japan will be releasing the BOJ’s monthly report and the Eco Watchers survey in March later at 5:00 am GMT. The BOJ recently stated that the economy is already improving but some data like the core machinery orders shows otherwise. In any case, any hawkish outlook could further lift the yen.
It looks like the yen’s massive correction has finally come to an end as it ended the day with a loss in yesterday’s trading session. The yen fell against the dollar, the pound and the euro.
The Bank of Japan’s monthly report released yesterday showed that was slightly more optimistic though. It revealed that the bank believes that financial credit conditions have eased due to their very accommodative monetary policy. Additionally, the bank said that deflation will soon moderate as demand for Japanese goods start to pick up.
No important data from Japan today so the yen would most likely be driven by risk sentiment flows and economic news coming out from other major economies, particularly Ben Bernanke’s speech at 12:30 am GMT today.