Finance Minister Yoshihiko Noda must be thanking his good ol’ buddy risk appetite for depreciating the yen against all major currencies yesterday. Better-than-expected economic reports across the world boosted risk appetite in markets, and brought USDJPY 106 pips up from its open price at 87.96. EURJPY, too, rocketed to a 114.36 close after opening at 112.93.
Remember that the Bank of Japan wants to prevent too much appreciation of the yen to make their exports more attractive? Well they might have gotten what they asked for yesterday when the lack of reports from the country left the yen vulnerable to positive reactions from euro zone’s consumer confidence data and UK’s CBI report.
Of course, it doesn’t mean that headaches are over for the BOJ officials. After all, they still have to deal with the 21st consecutive monthly drop of the Corporate Services Price Index released last Monday.
Will the annualized retail sales report today at 11:50 pm GMT reflect any improvement in their economy? The data for June is expected to increase by 3.3% after May’s 2.8% rise, but a better-than-expected figure might be good for the country’s deflation problems.
Move, get out of the way, the Yen’s coming through! Yesterday’s price action saw the Yen bully around all of the other major currencies as risk aversion struck the markets. USDJPY fell 52 pips from its opening price and landed at 87.97.
Fears over a global economic slowdown, together with weak US economic data led investors to buy up the safe-haven currency.
But the Yen received plenty of support domestically as well. As expected, its June retail sales report showed an annualized growth of 3.2%, accelerating from the previous month’s annualized pace of 2.8%.
Will today’s releases be just as positive?
At 11:30 pm GMT, Japan will publish its unemployment rate for the month of June, which is highly expected to remain at 5.2%. Keep an eye on this one as it could lead to a Yen bull run if results come in better than expected.
At the same time, the household spending report is scheduled for release. Analysts believe consumer spending fell 0.9% in June, just as it dropped 0.7% in May. But given yesterday’s healthy retail sales figure, we may be in for an upside surprise which could strengthen the Yen even more.
Following up at 11:50 pm GMT is the June preliminary industrial production data, which is anticipated to reveal that industrial output increased by 0.2% in June, double the pace of May. As usual, better-than-expected results can trigger a Yen rally, so stay sharp!
Hah! Who’s the weakling now?!? Last Friday the yen won the battle of bad economic data after worse-than-expected reports across the oceans weighed heavier than Japan’s own disappointing data. Risk aversion sent the traders to the low yielding yen, and pushed USDJPY 45 pips lower than its open price at 86.39. Meanwhile, EURJPY fell 121 pips from its 113.80 intraday high at 112.59.
Mixed data from Japan last Friday should’ve made the traders cautious after the annualized household spending increased by 0.5% in June, but the core CPI dropped by 1.3% in July, unemployment rate swelled to 5.3%, and industrial production fell by 1.5% after May’s 0.1% growth. These data suggested that Japan’s deflation problems might be around longer than officials thought.
But the big drop in German retail sales and the US GDP was just too glaring to ignore. The disappointing data reminded traders that the world’s biggest economies are far from declaring victory against recessionary pressures, which sparked another round of risk aversion in markets.
Will today’s data make more impact on the yen’s moves? The annualized cash earnings is scheduled today at 1:30 am GMT. A better than the expected 0.7% growth might be good for the economy since higher earnings can translate to more consumer spending.
“Risk aversion was so yesterday,” said the currency bulls after they dropped low-yielding currencies like the yen following the better-than-expected reports around the world. USDJPY gained 21 pips at 86.47 after an intraday high of 86.89, while EURJPY headed straight for 113.89 from its 112.68 open price.
It seemed that all eyes were on high-yielding currencies after euro zone and UK’s manufacturing PMI printed higher than analysts expected and inspired another round of risk rally in markets.
Japan did release their own positive report, but the fourth straight rise in average earnings shown by June’s 1.5% increase did little to boost the yen after the data reflected that employers added more hours to workers instead of adding payrolls. Talk about deceiving! Ha!
Will the yen gain the bulls’ attention today’? No reports are scheduled for release, but keep an eye out for any statement that could affect risk appetite!
Sayonara, Yen bears! The bulls are taking over! The Yen took control of the charts yesterday, pushing USDJPY down to an 8-month low to close at 85.83 from its opening price of 86.47.
Although no reports were published in Japan, that didn’t stop the Yen bulls from doing their thing! They found plenty of fuel for their rally from the disappointing US economic data.
That doesn’t mean all is well in the Land of the Rising Sun! Signs of economic slowdown in China and the US could negatively impact Japan as well, since these two giants are Japan’s biggest trading partners. But Finance Minister Noda’s offered soothing words in his speech yesterday, saying the government will be more actively involved in trying to stimulate growth to ensure Japan’s recovery.
Since the Japanese press will be silent again today, set your eyes to the west where the US is set to publish its ADP employment survey and ISM non-manufacturing PMI. If the results of these reports come out disappointingly, Yen bulls could be in for an extended rally.
Still, it’s best to be careful out there, kids! The Bank of Japan has been very vocal about not wanting the Yen to appreciate too much in order to protect their exports from becoming too expensive in global markets. They might do a bit more jawboning or maybe even intervene if the Yen continues to forge new heights.
Whew, that was a close one! The BOJ can rest for another day as yesterday’s yen weakness lessened pressures for a currency intervention. Positive economic reports enabled the yen to drop by 44 pips against the dollar at 86.27. Meanwhile, EURJPY and GBPJPY pared off their losses from earlier in the day at 113.57 and 137.13 respectively.
Remember that the BOJ prefers a weak yen because a cheap currency would make their exports more competitive, and might help keep the Japanese economy from deflationary pressures.
Will the threat of a strong yen come back to trouble the BOJ like Plankton plagues Mr. Krabs in Spongebob Squarepants? Watch out for the red flags that could affect risk appetite! We might see a lot of excitement today with BOE and ECB’s interest rate decisions and the US unemployment claims on tap between 11:00 am GMT to 12:30 pm GMT. Don’t let me catch you snoozin’!
“Look, no hands!” Like kid showin’ off his biking skills to his momma, the yen proved that it can gain against the majors without publishing any report. USDJPY dropped 46 pips from its open price at 85.82, while EURJPY ended the day at 113.20 after reaching an intraday high of 113.91.
In his conference yesterday, ECB President Jean Claude Trichet gave glowing reviews about the euro zone’s growth, and said that it was growing faster than many expected. Too bad this didn’t do much for risk appetite, especially after the BOE kept their raise interest rates at 0.5%, and the US unemployment claims disappointed expectations.
Today Japan only has its leading indicators for June on tap at 5:00 am GMT, but a couple of red flags are up ahead in other regions, including the big NFP report for the US. Will we see markets running for cover towards the low-yielding yen? Trade carefully!
With the way it flexed its muscles last Friday, I’m betting the yen is on some crazy steroids! Give me some! Just kidding, I’m already buff enough! To end the week, USDJPY dropped massive pips, falling from its daily opening price of 85.82 to reach an intraday low of 85.02.
Even though no hard-hitting releases were made in Japan, the yen was able to make large strides uphill thanks to the dollar’s weakness. With the worse-than-expected US non-farm payroll data, the yen looked even more attractive to investors. But not as hot as you, Queen Cleopiptra! Yowza!
USDJPY is now flirting dangerously with the 85.00 handle, the level at which the Bank of Japan (BoJ) had previously warned they would intervene. Hmm… Does this mean they’ll be stepping in soon?
We’ll have to wait until Wednesday when the BoJ holds its press conference during the Asian trading session to get more clues. Keep your eyes glued to the tube for any jawboning or dovish remarks that could spark a yen bear run!
At 11:50 pm GMT of the same day, the June key machinery orders report is set to show a 5.4% growth, following the 9.1% decline in May. Key machinery orders is usually treated as a main indicator of corporate spending in the coming months, so look out for a yen rally if June posts better-than-expected figures!
The yen turned out to be the biggest loser in yesterday as it lost out against most major currencies. The USDJPY, GBPJPY, EURJPY, AUDJPY, and even the CADJPY were able to post gains in yesterday’s trading session.
Does this mean that the buy-the-yen trend is over? Hah, you wish! With the majors unable to post new significant highs against the yen, I suspect this is simply a retracement ahead of the Bank of Japan’s interest rate decision and traders will be keen on selling the yen crosses at better prices.
Still, keep an ear out for the BOJ’s accompanying statement… If the BOJ starts talking about currency intervention to weaken the yen, then we just might see that reversal on the yen crosses that the bulls have been waiting for…
The Japanese yen flexed its muscles yesterday and strengthened against its major counterparts. At the end of the day, USDJPY closed at 85.80 after tumbling from a peak of 86.24.
Upbeat comments from BOJ officials lifted the yen’s spirits yesterday. According to them, the Japanese economy stayed resilient to yen strength as corporate profits continued to improve. Although they pointed out that their currency’s persistent appreciation presents a downside risk to their economy’s recovery, they also promised not to make any drastic intervention moves unless the rising yen threatens to push Japan back into recession. BOJ policymakers decided to keep rates unchanged at 0.10% and maintain their current assessment and outlook for the Japanese economy.
The core machinery orders, which came in weaker than expected, failed to douse the yen’s advance since it still printed a rebound over the 9.1% decline seen previously. Core machinery orders were up by merely 1.6% in June, much less than the 5.6% projected increase, as the rising yen cooled demand for Japan’s products. Yikes, would this report convince the BOJ to be more watchful of the yen’s advance?
Japan won’t be releasing any high-impact reports today. Only the BOJ monthly report is due and this could shed more light on the underlying figures that convinced the central bank to keep rates on hold for another month. Stay tuned for that at 5:00 am GMT.
The yen was the only major currency that was able to hold off the mighty USD yesterday. From its opening price of 85.35, USDJPY dropped to as low as 84.73 before it rose to close at 85.39.
The main event in the Land of the Rising Sun yesterday was the Bank of Japan’s monthly report, which maintained its slightly optimistic outlook for its economy. They’re expecting a moderate recovery, with exports, production and private consumption picking up, but are still worried over the yen’s appreciation.
They’re afraid that if the yen strengthens even more, it will hurt their export industry by making Japanese products more expensive in global markets. In the past, Japan has resorted to jawboning to keep the yen from gaining. But since it has been a long time since the markets saw an actual intervention, analysts are beginning to question the effectiveness of these seemingly empty threats.
Today, we’ll see what Japanese officials have to say when the minutes of their most recent monetary policy meeting will be published at 10:50 pm GMT. Watch out for this one because it could provide you with valuable insight about where the BoJ sees its economy going and what it plans to do in the future.
As my dad always says, “Try and try until you succeed!” Once again, buyers tested the 85.00 handle yesterday, but failed to push USDJPY past the significant support as the pair settled 51 pips higher at the end of the day.
The yen was weak across the board yesterday, thanks mostly to comments made by Japanese officials. Finance Minister Noda said that they will be closely watching currency market movements with great interest. A bit of jawboning, eh?
Are they merely crying wolf or do they really mean business this time? After all, the BOJ hasn’t intervened since 2004! Rumor has it that Japanese authorities might ease monetary policy further,instead of selling truckloads of yen in the markets, to keep the yen from appreciating. In any case, their threats weren’t taken lightly and were enough to scare buyers away yesterday.
Don’t expect any economic reports in your inbox from Japan today. The Japanese press is off to an early weekend! However, it would be wise for you to check out the US CPI and retail sales reports coming out at 12:30 pm GMT. Those high-impact releases could rock USDJPY!
It seems like the BoJ’s intervention talks are scarier than the Cryptkeeper’s ghost stories. Just check out how the yen continued its losing streak against the dollar last Friday! After reaching an intraday low of 85.57, USDJPY scrambled up the charts and peaked at 86.38. It ended the week at 86.29 with the yen sustaining a 39-pip loss.
So what was new with the yen’s intervention horror story?
Well, word in the market was that there were more than 100 members of the Democratic Party of Japan urging finance minister Yoshihiko Noda to intervene. On top of that, the minutes of the latest BoJ meeting showed that the central bank is worried about the currency’s strength. Aaack!
And it didn’t stop there. A report also showed that consumer confidence in the country continues to decline. Uh oh. The Cabinet Office announced last Friday that the consumer confidence index fell short of the 43.9 forecast at 43.3 in August and worse than the previous reading which was at 43.5. This combo probably spooked away currency traders from the yen as it made the possibility of an intervention more rational, as it seemed like the improvement in the country’s industrial sector in July to -1.1% from June’s -1.5% reading, didn’t boost the yen.
Boo! It looks the traders will still have their intervention goosebumps today. Earlier, Japan’s preliminary GDP figures showed that the economy grew at a slower pace in the second quarter. It printed at 0.1%, missing the forecast which was up at 0.6% and the previous reading at 1.1%. Adding to that is the Tertiary Industry Activity Index for June which disappointed the 0.0% forecast by printing at -0.1%.
Duhn, duhn, duhn, duhn! We don’t have anything on tap for the yen until Wednesday with the METI’s leading indicators report. So, be on your toes for more intervention talks!
“I played you like a fool!” said the yen to the Greenback. It made a sucker out of its American counterpart during yesterday’s trading sessions as USDJPY dropped massive pips. It fell from its opening price of 86.10 and finished off at 85.33.
In spite of the worse-than-expected GDP figures which revealed that Japan’s economy grew just 0.1% in Q2 2010, well below forecasts for a 0.6% growth, the yen was able to rise against all of the other major currencies.
Some say the weak GDP data could give the BOJ more reason to weaken its currency. After all, China just overtook Japan as the world’s 2nd largest economy! In any case, many are attributing its recent strength to low US yields, which causes the yen to look even more appealing to investors.
Today will be another quiet one in the Land of the Rising Sun. So for now, keep an eye out for risk sentiment because if it goes sour, another yen-buying frenzy could ensue. But be careful! The BOJ might just act on their threats of an intervention soon!
Though no reports were published in Japan yesterday, a decline in Japanese stocks and words from the BOJ caused the yen to weaken… Just like kryptonite to Superman! USDJPY rose from an intraday low of 85.12 to hit a high of 85.68 before closing at 85.49.
Stocks dropped like hot potatoes in Japan yesterday as the Nikkei 225 stock average plunged to a nine-month low. It seems investors are starting to worry about the country’s economic recovery, causing them to sell off riskier assets such as equities.
In other news, BOJ Governor Masaaki Shirakawa and Prime Minister Kan scheduled an emergency tea party to talk about the yen’s recent gains. They’re looking more and more worried over their currency’s strength which is threatening to weaken their export industry. Is the central bank ready to step in?
Hmm… Maybe not yet. Sakakibara, Japan’s former top currency official said in a press conference that the US doesn’t want the BOJ to intervene. The problem for Japan is, without the backing of the US, the intervention efforts will probably just fail. What a dilemma!
The newswires will be quiet again today. In the meantime, be sure to get a good grasp of risk sentiment. The yen tends to rise in times of risk aversion, so stay on your toes!
Talk about a neck-and-neck competition! After the bulls hustled USDJPY to a peak at 85.69, the bears stepped up their game and brought the pair down to its intraday low of 85.19. But the bulls weren’t ready to give up just yet. They went for another rally and settled USDJPY at 85.46, only 3 pips lower from its opening price.
There was nothing on tap for the yen so the bears just moved according to the market’s risk sentiment. The currency gained against its higher-yielding counterparts although it wasn’t able to punch as much pips out of them as before.
Hmmm, I guess it’s safe to say that risk aversion has somehow toned down but it’s still in the market, lurking… just waiting for the right opportunity to haunt ‘em bulls.
Anyhoo, earlier today the yen lost its ground against the dollar because of reports that the BoJ has started considering additional easing steps to counter the currency’s strength. Uh oh… is an intervention on the yen’s horizon? I think investors won’t be dumping the currency like a hot potato just yet… Well at least not until they know exactly what the central bank is going to do.
However, the Industry Activity report from the Ministry of Finance at 12:30 may affect their decision. It is expected that production in the industrial sector of the country fell by 0.3% in June. If the figure prints worse than expected, the bears may lose their upper hand as this would just give the BoJ another reason to halt the yen’s gains.
After falling slightly during the Asian session, the yen turned out to be the currency of choice of traders when a wide-reaching case of risk aversion hit the markets during the US trading session. USDJPY had gone as low as 85.00 before it settled at 85.41 by the end of the day.
The primary cause of the risk aversion wave was weaker-than-expected US data. The initial jobless came out above forecast and rose to 500,000 from an upwardly revised figure of 490,000 last week. At the same time, the Philadelphia Fed Survey ticked down to -7.7, opposite the 7.2 reading initially expected.
There’s isn’t anything on Japan’s economic cupboard today, so we could see the yen exhibit some range-bound behavior. Keep an eye on those previous day highs and lows, as we could see them hold!
Due to the absence of any significant economic data, yen trading was as mixed as a bag of nuts last Friday. The currency managed to post some gains against the euro but was unable to do so versus the dollar. USDJPY ended the day with a 33-pip win while EURJPY closed 53 pips lower.
Looking forward, Japan’s economic cupboard this week presents no real event risk again so we could see price action remain muted. Still, keep an eye out for price action during the release of the country’s trade balance (Tuesday, 11:50 pm GMT), unemployment reports (Thursday, 11:50 pm GMT) and consumer price index (Thursday, 11:50 pm GMT) for potential trade setups.
While it may be true that the upcoming reports aren’t usually watched by traders, it doesn’t mean that they won’t be creating any volatility. Risk sentiment can change on a dime, especially nowadays as liquidity is low. Stay safe, folks!
The yen starred as the pip-ranha of the charts yesterday as it munched on pips at the expense of its counterparts. It gained 84 pips from the euro, 50 pips against the Pound and 34 pips from the dollar as USDJPY closed at 85.26. What spurred the yen into a pip-frenzy yesterday?
Well, there was risk aversion that might have sent traders running for the yen and then there was also the little chitchat that Japanese Prime Minister Naoto Kan had BoJ Governor Masaaki Shirakawa.
Everyone had been looking forward to the policymakers’ dialogue to see if a currency intervention is needed in order to tame the yen’s strength. Much to the bears’ delight, Chief Cabinet Secretary Sengoku, said yesterday that Kan and Shirakawa didn’t even mention the word intervention. Whoohoo!
However, he did not say if the government will implement monetary easing, which may have a kryptonite effect on the yen in order to spur economic growth. Hmm, I guess we’ll just have to keep an ear out for updates on that.
See if the yen will be able to keep its pip-ranha status on the charts with today’s reports.
At 11:30 pm GMT, we’ll see if Japan exporters kicked butt in July. The trade balance report is expected show that exports outpaced imports by 47 billion JPY, which is lower than the June’s 69 billion JPY figure. I think the differential has probably something to do with the yen’s strength, don’t you?
We’ll also have the Corporate Services Price Index which is considered as an indicator of inflation. It is expected that corporations paid less for services they purchased by 1% in July. Uh oh, a negative reading could add more worry about Japan’s deflation.
Risk aversion transformed the yen to Pipzilla yesterday as it stomped pips out its counterparts on the charts. USDJPY crumbled to its 15-year low at 83.61 before ending the day at 84.12, giving the yen a 111-pip win. And it’s winning streak didn’t end there! It also gained 132 pips against the euro and 303 pips from the Pound, yowza!
Will the yen continue roaring with pips today? Probably, given the market’s risk averse sentiment and the surprising upside in Japan’s trade balance. There were reports released earlier saying that the BoJ may step in to intervene despite Chief Cabinet Secretary Sengoku’s announcement that Prime Minister Kan and BoJ Governor Shirakawa didn’t think that directly meddling with the markets was an option. But with exports outpacing imports by more than 80 billion JPY in July and beating the market’s forecast of 47 billion JPY, the BoJ may be convinced to stick with its no-intervention stance.
We don’t have anything on tap for the yen today but we do have quite a handful for its counterparts. So watch out for em! If their actual figures come in lower than expected, the yen may just continue pip-rrorizing its counterparts!