DJ Yen was mixing up the charts last Friday! It chalked up varied results, with wins against the comdolls and losses against the euro and the Sterling. Versus the USD, the Yen was practically held to a draw as USDJPY ranged and rose 21 pips in the day to finish the week at 87.79.
Friday was a relatively quiet day for Japan. The only piece of data released was the monetary base figure. According to the report, the month of June witnessed a mere 3.6% annualized increase in the quantity of Yen in circulation. This number is below the forecast of a 3.8% uptick and the previous month’s record of a 3.7% increase. The lower-than-expected figure could be indicating a decrease in business activity and could be bad for the Yen if the trend continues.
Stay sharp this week, folks! It looks like the Japanese press will be on ninja stealth mode again, with only a couple high-impact reports on board.
We’ll have to wait until 11:50 pm GMT on Wednesday to get a taste of the current account data. Analysts believe Japan will see a wider surplus, from 1.242 trillion Yen last April to 1.317 trillion Yen in May. A larger trade surplus could mean that all is well in Japan’s export industry. Don’t forget, the Japanese economy is mostly export-driven, so better-than-expected results would probably boost the Yen.
At the same time, the machine orders report is scheduled for release and is expected to print a 3.0% decline, a big downturn from April’s 4.0% increase. Since machine orders is the primary gauge of business capital spending and often reflects business confidence, things could get bad for the Yen if results come in worse than expected.
USDJPY traded within a 38 pip range yesterday. After opening the week at 87.73, the pair inched its way up to the day’s high at 88.01, only to slip to the day’s low at 87.63.
The yen did very little pip-munching on the dollar yesterday as some traders attended the Uncle Sam’s extended birthday bash. There wasn’t any news from the Land of the Rising Sun either to entice the bears to binge out on USDJPY. I wonder how much different today will be for the yen.
We only have one report on tap from Japan. The Cabinet Office will reveal the leading indicators figure at 5:00am GMT. It is expected to print at 99.7, which is 1 less than April’s figure, implying that the country’s growth may have slowed down. Will it be mouth-watering enough for investors to fatten up the yen with pips? Errr… I guess not. Anyhoo, it ain’t final til the official announcement is out. So make sure you tune in to that!
The yen failed to sustain its gains after a rally in risk appetite reduced the demand for the low-yielding currency and wiped out its gains in the early sessions. USDJPY managed to close at 87.44 after its intraday low of 87.35, but EURJPY ended the day 54 pips higher than its open price at 110.49.
The yen got a boost early in the day from the reports that Chinese investors bought up a total of 541 billion JPY worth of Japanese government bonds in the first four months of 2010. This boosted the yen by as much as 68 pips against the euro.
Too bad the risk hungry bulls took a big bite out of the yen’s gains when the RBA maintained their high interest rate and Australia’s positive trade balance report boosted the demand for high-yielding currencies.
The strong yen might have also woken up the bears when Japan’s leading indicators missed the 98.9 expectations at 98.7 after April’s 101.7 index number. It looks like the strong yen had a negative impact on Japan’s exports. Remember, the stronger the yen compared to other currencies, the more expensive the country’s exports become.
We’ll know more about the strong yen’s impact on the economy when the monthly core machinery orders report is released at 11:50 am GMT. Orders are expected to fall by 3%, but a weaker figure might mean that manufacturers are less confident on their economy, which might be bad for Japan’s deflation problems.
The current account report that reflects the health of the Japanese exports will also be released at 11:50 am GMT. While it tends to have a weak market impact, a number lower than the expected 1.32 trillion JPY would support the trade balance report released previously that showed a weakening economy.
You can bet Yen bears were shouting “Kampai!” as they celebrated the currency’s big losses across the board yesterday. USDJPY rose from an intraday low of 87.02 to climb to 87.75.
As it tends to do, risk appetite took its toll on the Japanese currency. Investors were quick to sell the Yen for higher-yielding currencies after equities and commodities increased in prices.
Today, it looks like we’ll see more of the Yen’s weakness. Early this morning, the Japanese press gave Yen bears an early Christmas gift by revealing sad economic data.
Key machinery orders were down 9.1% in May, compared to forecasts of a 3% decrease and the previous month’s record of 4% growth. Lower machinery orders usually weigh down the currency because it signals decreased future manufacturing activity. Take note, manufacturing production is one of the biggest contributors to Japan’s economy.
Following up the disappointing key machinery orders report was the current account figure. The month of May posted a surplus of 1.21 trillion Yen in May. This number is not only narrower than the 1.24 trillion Yen surplus of the previous month, but it is also a far cry from the expectations of a wider surplus of 1.32 trillion Yen. Yikes!
Later at 5:00 pm, the June edition of the Eco Watchers Survey, which printed a reading of 48.7 in May, hits the stands. A reading below 50 indicates pessimism and low confidence, so yen bears may just pass out with glee if this report still manages to publish a decline. Easy with the sake, you bears! You don’t want to miss this!
Boy did the yen get some beating, whipping, and spanking from the bears yesterday! USDJPY traded higher as it opened at what would be the day’s low of 87.74. There was no other way but up for the pair as it closed at 88.40.
Japan’s not-at-all-awesome reports and risk appetite’s comeback was the perfect concoction for the market to release the bears on the yen. By the looks of it, it seems like it was the grizzlies that came out to play and not the care bears!
First up to fill the honey jar was the key machinery orders figures for the month of June, which grew only by 3.4%, falling short of the market’s 10.8% consensus. Investors may have taken the figure as an implication that growth in the country’s manufacturing sector may be slowing.
Adding chocolate syrup to the bears’ honey parfait was the frustration in the country’s account surplus and lending. Japan’s M2 money supply declined to 1.205 trillion JPY in June from the May’s 1.240 trillion JPY reading. On the other hand, the amount the government loaned to banks printed another 2.0% decline in June, marking its lowest level in five years!
Lastly there was the decline in the Economy Watcher’s sentiment index to 48.3 in June from May’s 48.7, reflecting Japan’s weak consumer spending.
To add the cherry on top of that delicious honey dish was the rally in the equity markets that could have spurred risk appetite in the currency market.
With the absence of Japanese reports for today, will the yen remain victim to the bears? Hmm… I guess that depends on the investors’ cravings. If you’re planning to enter in yen trades today, make sure you gauge market sentiment first!
The yen managed to level off its losses last Friday after the disappointing economic reports from UK put a damper on risk appetite. EURJPY closed at 112.03 after an intraday high of 112.67, and USDJPY closed 7 pips lower than its intraday high at 88.64.
Last week’s weaker than expected current account and machinery orders reports suggests that Japan’s battle with deflation is much tougher than most analyst initially expected. Hmm, was this why the yen was unable to put up a good fight against the attack of risk appetite last week?
If the yen got into trouble with their bad economic data, what will the traders think of the recent election results in Japan? Japan’s Prime Minister Naoto Kan failed to secure the parliament upper house, with the ruling Democratic Party of Japan getting only 44 votes against the opposition Liberal Democratic Party’s 51. Apparently the Japanese didn’t like it when Kan brought up the topic of raising the sales tax to help their debt issues.
Kan’s party will stay in power regardless of the outcome of the votes, but the split in the parliament might make it harder for Kan to pursue his anti-deflation policies. If we keep hearing about political rumblings, it may just lead to more bearish moves in the yen.
Will Japan’s economic data this week provide the yen some leverage? We’ll know more about consumers’ economic outlook when the confidence report is released tomorrow at 5:00 am GMT.
Thursday will be a big day for the country when the BOJ announces their interest rate decision at a tentative time. Though many analysts expect them to keep the interest rate at 0.1%, the monthly report will also reveal the BOJ’s sentiment on the economy, and might give clues on their future policies.
The monthly tertiary index will also be released on Thursday at 11:50 pm GMT, and while the spending in the service sector is estimated to decrease by 0.7% from April’s 2.1% increase, a better than expected figure might suggest improved economic activity.
Japan isn’t only the Land of the Rising Sun… But the Land of the Rising Yen, too! The Yen outclassed its American counterpart during yesterday’s trading sessions as USDJPY dropped from an intraday high of 89.16 to close at 88.61.
The Yen was able to muscle its way through the markets as it was pumped up by risk aversion. However, its gains were limited by the disappointing election results which led to the Democratic Party of Japan’s loss of control of the Upper House.
As a member of the DPJ, Prime Minister Kan was hoping to get 56 seats in the Upper House, but was only able to obtain 46. This means that in the future, Kan may find difficulty finding support for his economic policies, such as the raising of consumption tax. Sounds like trouble!
On deck for today is the household confidence report due at 5:00 am GMT. Analysts expect to see a slight drop in confidence in June, from a reading of 42.8 to 42.5. The Yen could come under a bit of selling pressure if the report shows that households are even less confident about economic conditions than expected.
Save versus the dollar, the yen lost in its pip-battles against most of its major counterparts yesterday. While the yen was able to steal 12-pips away from the dollar, the currency posted triple-digit pip against the euro and the pound.
The yen’s arsenal of positive economic reports was supposed invite the bulls to side with it, but it didn’t work. Industrial production increased 0.1% in May from April’s -0.1% reading and consumer confidence beat both the 42.5 consensus and the April’s 42.8 reading by printing at 43.5 in May. So what messed up the yen’s battle plan?
First, there was good ol’ risk appetite. The Greek bond auction yesterday turned out to be a success and somehow relieved investors of their worries on euro zone’s debt.
There was also the defeat of the Democratic Party of Japan in the Upper House elections on Sunday which flared the political instability distress signal. How did this damage the yen? Well soldier, this could mean that the government may not be in tip-top shape to fight the nation’s debt enemy because Prime Minister Naoto Kan doesn’t have most of his allies to back him up in the Parliament anymore.
It looks like the yen won’t be getting any ammo from today’s announcements from Japan. Although we do have the Bank of Japan’s monetary policy statement at 7:00 am GMT, it is very unlikely that the bank would give the yen a bazooka to shoo away the bears with an interest hike. But then again, that’s just me. Good luck with your trades!
The yen was a witness to the Asian power yesterday when it gained across the charts after the release of good economic data from Asian countries. USDJPY fell 51 pips from its intraday high at 88.40, and EURJPY ended the day 24 pips down from its open price at 112.67.
No major announcements were made from Japan yesterday, but Singapore posted a staggering 26% growth in their quarterly GDP. Wow! I guess people are really trekking over to Universal Studios and Sentosa!
The record rate and the positive economic reports from China last week implied that Asian economies might not be as affected by the euro zone debt crisis as previously analysts thought.
The US also gave the yen a boost when the FOMC meeting produced dovish statements, and the retail sales figures were far worse than expected. The reports hinted that the US recovery might be losing momentum. In turn, risk averse traders went to the safety of the low-yielding yen.
Will the yen continue to hold its “low-yielding” reputation? Many analysts think so. The BOJ’s interest rate decision will be announced today at 11:00 pm GMT, and while many expect the rate to remain at 0.1%, the BOJ could give clues on their economic outlook and policies. Don’t miss it!
After seeing the Yen’s awesome performance against the Greenback yesterday, you can bet Yen bulls were belting out their best versions of “Mr. Roboto” at their local karaoke joints. USDJPY was poppin’, lockin’ and DROPPIN’ as it fell from its opening price of 88.29 to finish at 87.46.
Earlier in the day, China stole a bit of the spotlight when it revealed that its economic growth was beginning to slow. This could have a negative effect on the Japanese economy since China is Japan’s largest trading partner.
But the true star of yesterday’s show was the BoJ, who stole the microphone and came out to sing an uplifting tune. Though they decided to leave interest rates at 0.1%, they gave Yen bulls hope by announcing their belief that Japan will see a moderate recovery in 2010. They went on to add that the Japanese economy’s growth potential will probably rise this year, with lots of help from other emerging economies.
At 5:00 am GMT today, we’ll learn more about the BoJ’s view on current and future economic conditions when they release their monthly report. Don’t miss it! It might just be the catalyst that will push the USDJPY to make a new weekly low!
“Swoosh! Ka-ching!” That was the sound that the yen made in Friday’s trading as it used its currency-samurai sword to slice and dice pips from its counterparts. USDJPY crumbled from the day’s opening price of 87.46, reaching 86.27 and until it closed the week at 86.67.
Yes you read it right, the currency emerged piptorious against all of its counterparts. On top of that, the yen bulls did it without any economic report from Japan. Could risk aversion’s comeback be the reason for the yen’s display of samurai strength in the charts? Hmm, probably… Stocks did take a hit last Friday, while both the dollar and yen managed some decent gains across the board.
However, the yen’s piptory may not last for so long with the Bank of Japan minutes release tomorrow at 10:50pm GMT. Yeah, the BOJmembers were more optimistic with regard to the country’s consumption but the strength of the yen may be too much for them. Japan has been struggling with deflation for a long time and a strong currency will only make things worse. Keep your ears open for any verbal intervention that could rock the markets.
Pleased to be making my first post on your fine site.
Pdiddy,
question re the UJ - So, the word is that the BOJ will come in and support the Yen @ 85. I took a look at the charts for UJ last week (weekly, daily and 4hr) and considered the 85 region to be a potential place for a nice long due to the fact it is an obvious area of support and also there are some nice positive divergence patterns on these higher tf’s, so if/when (I would say when due to the the BOJ saying it will support the Yen) we get a touch @ 85 there could be a nice bounce giving some decent Risk/Reward action. However my worry is that historically when a country has stepped in and said it won’t let its currency go past a certain level, it normally does!! so could this potentially make 79.80 ish the next target (andprobably a great place to put a long order) for the Yen if 85 doesn’t hold? tthen sell a pull back to 85 for pt of 79.80? (that is after a meaningful break of 85, wait for retracement to 85 and sell on touch IF momentum suggests oversold/divergences etc…)
Be careful with rumors G, as rumors will remain rumors until they happen. One thing to note about currency interventions is that they usually happen BELOW major support levels. There is a very good forexpedia article on central bank intervention, you should check it out! Just click here.
While the Japanese celebrated the blessings from their seas, traders across the oceans were undecided on their currency. The yen gained against the Loonie and the franc but lost 80 pips to the euro. USDJPY climbed 38 pips to 86.86 after opening at 86.48.
The mixed price action suggested that the low-yielding yen continues to attract the risk averse traders amid all the uncertainties of the US growth and the euro bank stress tests.
Hmm, is this why there are rumors that the BOJ will soon launch currency interventions? Remember that the yen’s appreciation makes Japanese exports more expensive. This is bad news for the government since they rely heavily on exports to fight their deflation problems.
Maybe we’ll know more on the BOJ’s plans when they release the minutes of their June meeting at 11:50 pm GMT. Will they give clues on their future policies? Don’t miss this update!
As of Q3 2003, the three central banks with the highest amount of FX reserves were: the Bank of Japan ($550 billion); the Bank of China ($346 billion) and European Central Bank ($330 billion).
Lesson for the day - Respect any BOJ intervention!!!
It’s alright, Yen old boy! It was just one of those days! The Yen was the weakest link in yesterday’s trading sessions as it managed to lose against ALL the majors. Ouch! The Yen continued with its slow start to the week as USDJPY posted a 58-pip gain and landed at 87.44 at the end of the day.
Once again, the Bank of Japan (BoJ) did what it does best and jawboned, hinting at intervening if the Yen appreciates too much. It looks like the BoJ is determined to keep the Yen from strengthening in order to keep Japan’s exports from becoming too expensive in the global markets. Nevertheless, this threat was enough to scare investors away from buying up the Yen. Leave it to the BoJ to spoil the Yen bulls’ party!
The economic calendar is blank for us today. But across the Pacific Ocean, US Fed chairman Bernanke is scheduled to testify before the Senate. See what he has to say at 6:00 pm GMT as he could drive the Yen further down if he lets loose a few hawkish comments.
The yen was high up on the charts like a rockstar carried by a moshpit of bears yesterday! It gained 43 pips against the dollar, 60 against the euro and 158 against the Pound. And with all those pips, the yen just couldn’t help taunt its counterparts by singing, “That’s what you get when risk aversion kicks in! Whoo-oooh-oooh!”
Renewed worries of global economic slowdown that came from Fed Reserve Chairman Ben Bernanke and the fall in equities led the market’s spotlight to focus on the ‘safe haven’ currency. Fortunately for the yen, the Bank of Japan’s minutes from its most recent Monetary Policy Meeting didn’t cause investors to worry about Japan too. It stated that although the country’s economic recovery isn’t exactly awesome because of the tensions abroad, it remains to be stable.
I guess investors were desperate to seek refuge amid the financial crisis because they still showed the yen some lovin’ even when the BoJ said that it will keep interest rates low to fight deflation. However, BoJ Deputy Governor Yamaguchi also implied that the bank won’t be spanking the yen with an intervention anytime soon despite its recent gains that could worsen that big bad D-word.
See if the yen will still be rockin’ the charts and rollin’ in pips today. But things aren’t looking so well for yesterday’s currency rockstar looking at the All Industries Report from METI, which will be released at 4:30 am GMT. It is anticipated that the change in the value of goods and services bought by businesses in Japan fell 0.4% in May after posting a 1.8% increase in April.
However, risk aversion may still be chillin’ in the markets later so not all hope is lost for the yen. So make sure you gauge the sentiment when you put in your trades.
“Retreat! Retreat! The enemy has weakened!” said the BOJ after yesterday’s rally in risk appetite pared off the yen’s gains last Wednesday. USDJPY rocketed to 86.91 after plunging to an intraday low of 86.34, while EURJPY flew 156 pips from its intraday low at 111.98.
It seemed that the BOJ had the euro as its ally after their better than expected manufacturing and services report jumpstarted the adrenaline of the currency bulls. In fact, they even shrugged off a better than expected all activity index report! The data printed a 0.2% increase in May after analysts already pegged a 0.4% fall.
But why would a central bank want to reduce the value of their currency? Remember that BOJ has been making noise lately about launching currency interventions in case the yen appreciates too fast. This is because Japan depends on their exports for economic growth, and an expensive currency won’t exactly make their export products competitive.
Our wanted list is empty for today, but keep an eye out for any reports that could shift risk appetite! That big EU stress test reports today can do some serious pip damage to the risk related currencies if too many banks failed, or if the tests lost their credibility. Good luck in your trades!
With no reports providing a beat to dance to, the Yen was forced to improvise and dance to the rhythm of risk sentiment. Unfortunately, yen bulls had to two left feet and couldn’t find its groove, bringing the Yen to its knees against almost all of the majors. USDJPY posted a 46-pip gain last Friday and ended the week at 87.37.
To make matters worse, late last night, Japan revealed a June trade surplus of 460 billion Yen, which is 80 billion Yen short of expectations. In fact, analysts were so disappointed that they even decided to revise the May figure downwards from 420 billion Yen to 320 billion Yen! Not the best way to start the week, don’t you think?
But don’t count out the Yen just yet. With such a busy week ahead in Japan, who knows what’s in store for you.
Wednesday presents the annualized retail sales report at 11:50 pm GMT. Analysts are a bit optimistic about this one, expecting to see a 3.2% increase in retail sales in June, up 0.4% from the previous month. As a leading indicator of consumer spending, the report has the ability to start a Yen-buying frenzy if it prints an upside surprise.
You had better come prepared on Friday, because you’ve got a barrage of reports flying your direction.
It’s the perfect opportunity to put analysts’ fortunetelling skills to the test!
They’re predicting that the unemployment rate will stay at 5.2%. They also say real household spending in June will fall by 0.8% following a 0.7% decrease in consumer expenses in May. As for industrial production, they think it will increase by 0.2% in June after growing 0.1% in May.
We’ll find out just how good these analysts are at reading the future at 11:30 pm GMT. Strap on your trading caps, kids! The simultaneous release of these reports could send big waves through the markets. As usual, better-than-expected results could send the Yen sky-rocketing, so don’t blink!
Save for the dollar, the yen wasn’t able to bust pips out of its counterparts as risk sentiment improved. USDJPY consolidated around its opening price at 87.72 before it head down into the day’s low at 86.82. The dollar tried to make a run for it during the New York session but the bears caught up to it and settled the pair at 86.85.
The yen’s 88-pip gain against the dollar was pretty impressive considering that there were no economic reports from Japan yesterday and US housing data printed positive figures. Well, I guess this means that investors aren’t ready to put their two pips on the US economy just yet.
But wait.. Word in the market is that the [BoJ](http://www.babypips.com/forexpedia/BOJ) isn’t happy with the yen’s gains especially after the [trade balance](http://www.babypips.com/forexpedia/Trade_Balance) data showed that [exports](http://www.babypips.com/forexpedia/Exports) fell in June. And it looks like today ain’t a good time for the currency to show off its strength. The CSPI, which measures the change in the price of services purchased by manufacturers, was reported earlier to have declined by 1% in June. Uh oh. It looks like the BoJ has one more reason to be suspicious about the mighty yen helping [deflation](http://www.babypips.com/forexpedia/Deflation). Aaack!
We don’t have anything left for the yen on our economic calendar for today. So make sure you get a good listen to the market’s sentiment towards risk when you make your yen trades. Good luck!
