Oh boy, BOJ officials must be getting pretty annoyed right now. Despite intervening in the markets last week, the yen has remained resilient and “benefited” from all the dollar weakness we’ve been seeing. USDJPY dropped another 50 pips, bringing it down to 84.55. Will we see another intervention by the BOJ?
If BOJ member Ryuzo Miyao’s comments are any indication of what the central bank has planned, then I’m banking on the side of more intervention. Miyao said that the central bank cannot ignore threats to Japanese economic recovery, one of which has been the persistent rise of the yen. He also said that the BOJ has some tricks up its sleeves, some of which are direct Japanese bond purchases as well as currency intervention.
Remember, Japan has a very export dependent economy, so the rising yen actually hurts their exports industries. The fact that the US economy is struggling right doesn’t help their cause either, as investors will look for currencies like the yen and Swiss franc for their safe haven status. Not to mention the fact that the Japanese economy is actually performing better, as indicated by the latest all industry activity index figures. Yesterday’s report revealed that growth has been picking up the last couple of months.
Japan will be on a banking holiday today, so we may not see much movement until the European and US sessions begin. Watch out for PMI reports from the euro zone, as these reports could set the tone for trading today.
Man, oh, man, this is gonna piss off the BOJ! Thanks to a run of aversion yesterday, USDJPY dropped for the third consecutive day to close at 84.33. My, oh, my! Will the BOJ intervene once again?
After intervening in the markets last week, USDJPY has now dropped just over 150 pips and is slowly creeping back down the charts. Rumors are that the BOJ could once again intervene, when we least expect it. Still, after reading Forex Gump’s latest post, I’m not too sure if it’ll turn out to be a smashing success…
USDJPY received a bear hug from traders last Friday, aww! The yen was able to recover the losses it got against the dollar during the Asian session when USDJPY touched an intraday high of 85.39, by ending the day 7 pips lower at 84.27.
Word on the street is that the Bank of Japan (BOJ) once again [intervened](http://www.babypips.com/forexpedia/Central_Bank_Intervention) in the FX market to weaken the yen. Too bad for the anti-strong-yen peeps there in Japan, it seems like market is more scared of the dollar than the BOJ. Ha!
Hmmm, it looks like the central bank will be getting more headaches from all this yen-lovin’. Yesterday we saw that Japan’s trade balance figures for August came in at 59 billion JPY which beat the market’s 52 billion JPY forecast. Woot woot! Making the yen even more attractive to traders is the Corporate Services Price Index (CSPI) for August which printed a 1.1% decline, softer than the 1.2% fall that traders had braced for.
Let’s see if [BOJ](http://www.babypips.com/forexpedia/BOJ) Governor Shirakawa will belt out something dovish to cap the yen’s gains in his speech later at 5:30 am GMT. You may want to keep tabs on that as I think he would drop more hints on the BOJ’s intervention quips.
Whoa! USDJPY’s tight, 29-pip range yesterday reminded me so much of Forex Gump’s superfit-spandex muscle shirt. Ha! The pair opened the week at 84.37 and inched to an intraday high of 84.40. It then bottomed at 84.11 before it ended the day at 84.22.
Just like every other currency in the FX hood, the yen also benefited from the market’s anti-dollar sentiment. So, I think it would be best for you to get a feel of the market’s mood to help you with your trades, as we still don’t have any economic data from Japan today. Be very careful though. The BOJ may decide to pull the [intervention](http://www.babypips.com/forexpedia/Central_Bank_Intervention) trigger again now that USDJPY is getting nearer to the 84.00 handle.
Tomorrow we’re in for a treat with the roster of high-caliber reports we have on tap for the yen. At 11:50 pm GMT, we have the [Tankan Manufacturing index](http://www.babypips.com/forexpedia/Tankan_Survey_-_Japan) for the third quarter which is seen to come in at 7.0, following its 1.0 reading in June. We also have the country’s retail sales for August, projected to have been up by 4.6%, and the industrial production index with a 1.2% forecast.
Then on Thursday at 11:30 pm GMT, we’ll see if [inflation](http://www.babypips.com/forexpedia/Inflation) pressures improved to -1.0% in September following the 1.1% decline in both Tokyo and the National CPI readings in August. Lastly, we have the real household spending figures for August which is eyed at 1.4% and the unemployment rate seen to have been at 5.1% during the month.
Sniff sniff Do I smell another currency intervention? Okay maybe not, but with all the relatively good economic data from Japan highlighting the bad ones in the US, it might just be around the corner!
USDJPY dropped below 84.00 for the first time since the BOJ intervention, and ended the day at 83.95. Good thing EURJPY is not joining in the yen rally as it closed at 114.00 after dipping to an intraday low of 112.68.
Yesterday’s Tankan manufacturing report gave the yen bulls a reason to cheer when it clocked in at an index figure of 8 after printing at 1 in the second quarter. Wow, those Japanese manufacturers must love extending their party!
The rise in business confidence in the manufacturing sector is the sixth consecutive quarterly rise, and is the highest level in seven and a half years. Meanwhile, the non-manufacturing sector also did its own party when it printed an index figure of 2, up from last quarter’s -5.
We’ll know more about the manufacturing industry when Japan releases the manufacturing PMI report today at 11:15 pm GMT. This will be followed by the preliminary industrial production and the retail sales report at 11:50 pm GMT. With the lack of data from the US today, you better keep close tabs on these data!
Oh-oh-oh-my-gosh, the yen is at it again despite a string of disappointing economic reports! USDJPY bottomed at 83.50 before ending the day at 83.66 with a 30-pip gain for the Asian currency.
Yesterday, Markit reported that the manufacturing PMI was lower in September at 49.5 from 50.1 in August. There was also the preliminary industrial production index for August which showed that production declined further by 0.3% following July’s -0.2% reading and falling short of the 1.2% consensus. Tsk, tsk. Then, to complete the roster was the retail sales figures for the same month. METI announced that consumer spending was higher in August by 4.3% compared to July when the index was only at 3.8%. However, the reading was unable to beat its 4.6% forecast. Yikes!
I bet those not-so-stellar figures just gave the BOJ dudes more reason not to put their Usher on and just let USDJPY burn. Ha! So make sure you tune in to the economic reports we have on tap for today as some naysayers would probably credit disappointing stats to the yen’s strength.
At 5:00 am GMT we have the construction orders and housing starts reports for August. An increase in the number of start orders received by construction companies which fell by 0.7% would be probably be bullish for the yen, along with a better-than-expected figure for housing starts which is eyed at an annual rate of 10.2%.
Hmmm, then again, positive figures may also give the yen more hustle and the BOJ a more instense headache. Aaaack! I guess we’ll just have to be on our toes for signs of another intervention. Be extra-careful with your trades, good luck!
The yen went brought its Pipzilla back yesterday as it munched pips from most of its counterparts. GBPJPY closed lower by 88 pips and so did EURJPY but only by a modest 17 pips. USDJPY dipped to its lowest since the intervention at 83.16 before it ended the day with a 12-pip win for the yen at 83.53.
Some find it a little weird that we saw Justin Timberlake’s rap comeback first before the BOJ’s intervention. Some naysayers think that maybe it’s because Japan doesn’t want to get on the US’s bad side, who is giving China the cold shoulder for currency manipulation.
Oh by the way, did you hear about the Ministry of Finance’s statement yesterday that the amount the government shelled out for its intervention on September 15 was only half of how much they spent on 2004? Yep, this implies that they only intervened once, and they had nothing to do with the sharp rally last Friday on USDJPY.
Anyway, yesterday we saw mixed reports for August with retail sales printing at 4.3%, short of the 4.7% consensus, and industrial production declining by 0.3%, missing the 1.1% growth forecast. On the other hand, housing starts during the month came in at 20.5% on an annual basis, which was more than twice of the 10.2% projection.
For today, we saw earlier that CPI readings for Tokyo and Japan as a whole came in as expected at -1.0% for September. The unemployment rate for August also hit the market’s target at 5.1% while real household spending for the same month was higher at 1.7% than the anticipated 1.4%.
Word on the street is that it might have been a tinge of risk aversion that made the yen mutate into a pip-monster with equities showing weakness in yesterday’s trading. I wonder if there’s enough of the sentiment left for today to counter fears of another BOJ intervention.
Whoops! Despite the lack of reports from Japan last Friday, rumors on a possible increase in monetary stimulus by the Bank of Japan caused the yen to slip against its major counterparts (except for the dollar). USDJPY dropped by 17 pips at 83.31, but EURJPY rocketed by 99 pips at 114.80.
Is this why we haven’t seen the BOJ intervene despite USDJPY reaching its pre-currency intervention levels? I hear that both Prime Minister Kan and Finance Minister Noda have been giving the usual “we will monitor the risks closely” speeches lately.
While we wait for the results of the BOJ’s slumber tea party, we could get some action from the reports this week. Japan started off with the average cash earnings report a few coffee cups ago. The data showed that earnings didn’t grow last August, but total income in July was upwardly revised from 1.3% to 1.4%.
The Bank of Japan will hog the spotlight tomorrow when the monetary policy decision is announced at 11:00 pm GMT, followed by a press conference. Market geeks expect the interest rate to remain at 0.10% this month, but traders are going to watch for any hints at the BOJ’s stimulus plans.
Other important news on deck this week include the BOJ monthly report tomorrow at 5:00 am GMT, and the leading indicators, machine tool orders, and current account reports on Thursday. Don’t even think of missing these ones out!
Kaboom! After it looked like yen was going to tank, it revved up during the European session to take control of the currency markets. After hitting a high at 83.87, USD/JPY lost steam and dropped to 83.42.
Hmmm… what the heck happened early in the Asian session yesterday? Yen crosses rose across the board. Was this another attempt of intervention by the Bank of Japan? Or could it be the news that Ichiro Ozawa (the dude who ran against Prime Minister Kan but lost) was indicted for violating campaign fund laws?
Either way, sentiment died down pretty fast, as the yen rallied and took just minimal losses. It looks like traders are just too bullish on the yen right now!
Be careful though, as sentiment could change pretty quickly later today one the BOJ releases its monetary policy statement. Nobody is expecting a rate hike, but watch out for comments on the yen, as well as the possibility of other quantitative easing measures. Any mention of intervention or more QE might just stem the yen’s rise.
Wooooo! What the sushi is going on in the markets? Thanks to some crazy moves by the BOJ, yen trading was all over the place yesterday. EUR/JPY rose nearly 100 pips from its opening price to close above the 115.00 handle. On the other hand, the yen continued to dominate the dollar, as USD/JPY tested the 83.00 handle before closing at 83.21.
The big news to hit the Asian session yesterday was the Bank of Japan’s decision to go back to a WTH-ZIRP (that stands for “what the heck – zero interest rate policy). In addition to that, it also introduced a Japanese bond purchase program worth 5 trillion yen. Clearly, BOJ officials are sick and tired of the deflationary spiral that Japan is stuck in, as well as the persistent rise of the yen. These moves were done in hopes that they could help prop up the Japanese economy.
Still, the fact that the yen didn’t disintegrate into thin air reflects the mixed reaction from the markets. It’ll be interesting to see though, if this will be the start of more aggressive moves to be made by the central bank in the near future. Something tells me that BOJ officials are just waiting for their pals over at the Fed to make a decision about their own monetary policy before deciding what to do next.
What intervention?! Continued dollar weakness pushed USD/JPY back to its pre-currency intervention levels, dipping to an intraday low of 82.76 before ending the day 28 pips lower at 82.92.
No report was released from the Land of the Rising Sun yesterday, but an economic forum agreed that the Japanese economy might encounter a bump in the near future once the effects of the recent economic stimulus winds down.
We can know more about the BOJ’s outlook on the economy today when a slew of economic reports is released. The parade will start at 5:00 am GMT with the leading indicators report, followed by the preliminary machine tools orders report at 6:00 am GMT.
The star of the parade is the BOJ’s meeting minutes at 11:50 pm GMT, and the current account report will end the day at 11:50 pm GMT.
“[I]O Naoto, Naoto! Wherefore art though, Naoto?[/I]” Yesterday the yen groupies ignored the weaker-than-expected economic data from Japan and boosted the yen up the charts. USD/JPY plunged to an intraday low of 82.11 before closing 52 pips lower at 82.40. Meanwhile, EUR/JPY fell by 91 pips to 114.64. This makes traders wonder, “Where the heck is the BOJ to address the strong yen?”
Maybe the BOJ members were having a tea party in an office as they discussed their strategies for the economy. You see, a few coffee cups ago they announced their proposal to inject a total of 5.1 trillion JPY to stimulate the Japanese economy, with 3.1 trillion JPY going to the regional economies and small businesses. Of course, the plan still needs parliamentary approval, but hey, a plan is a plan, right?
Only the economy watchers sentiment report will be released from Japan today, but keep close tabs on the big NFP report from the US. Also keep your eyes on today’s G7 and IMF meetings as it could produce important announcements…or catfights among the currency warriors. Don’t miss out on these events!
De ja vu?! The yen trampled the USD once again as disappointing U.S. data kept the American currency weak against the solid yen. USD/JPY fell to a new low and rested at 82.08 after it had opened at 82.40.
You’re treading on dangerous ground, yen bulls! Last Friday’s climb drove the yen to new heights. The question is, “How long before the BOJ steps in to spoil the party?” We’ve already seen the BOJ’s past interventions fail at holding their currency back. Even announcement of a new asset purchase program and lower interest rates didn’t help. What more can they do??
This week, the only high caliber report Japan will be dishing out is its August key machinery orders data. The last report printed a strong 8.8% uptick for the month of July, but expect to see the yen take a pause from rallying if results come in lower than the expected 3.8% downtick. Catch it tomorrow at 11:50 pm GMT!
“[I]And I just can’t bring myself away…I just can’t stop, I just can’t stop[/I]” The yen pairs did a Ne-yo number in the markets yesterday as they just couldn’t stop surpassing their pre-currency intervention levels in the pip charts.
Despite the Health Sports holiday in Japan, USD/JPY dropped to an intraday low of 81.38 before ending the day at 82.12. Meanwhile, EUR/JPY dropped by 74 pips at 113.92, while GBP/JPY fell by 36 pips at 130.34.
The Land of the Rising Sun will make up for the lack of reports yesterday by starting the day with the household confidence report at 5:00 am GMT. The index is expected to increase to 43.9 in September after tumbling to its 42.4 last August.
The monthly core machinery orders report will also hit the pips charts today at 11:50 pm GMT. Market geeks expect the data to drop by 3.7% after gaining by 8.8% last July, but a better-than-expected figure might drive the yen higher against its major counterparts. Yikes!
“We are here. We are waiting.” The Bank of Japan finally turned all Optimus Prime on the markets yesterday after the yen remained on dangerously low levels against its major counterparts. USD/JPY dropped by another 27 pips at 81.85, while EUR/JPY ended the day nearly unchanged at 113.90.
After remaining mum on the yen’s appreciation despite the BOJ’s currency intervention, Japan’s Finance Minister Noda finally returned to his “We are closely watching” speeches when he said that the BOJ is closely monitoring forex moves, and that it will take decisive steps including another intervention if necessary.
Of course, yesterday’s positive economic reports certainly didn’t help the BOJ. Though household confidence fell to its 41.2 index figure, core machinery orders rose by 10.1% in August. This is an improvement from July’s 42.4 number, and the expected 43.9 figure.
Will the yen up for more gains today? The report on the change in prices of goods sold by corporations is scheduled at 11:5 pm GMT. Market geeks don’t expect any growth in prices, but keep close tabs on any surprises!
We were back to regular programming for USD/JPY yesterday as it inched ever lower down the charts. But while the yen performed well against the USD and CHF, it left a lot to be desired versus the other majors. USD/JPY crawled 10 pips down to 81.75, while EUR/JPY rose from 113.90 to finish at 114.10.
Just minutes ago, the report on the change in the price of goods sold by corporations marked a 0.1% decline in prices to miss forecasts for 0.0%. This marks the third month in a row that Japan has failed to record an uptick in this department. You gotta start to wonder if this is a sign that deflation is back to haunt the economy.
In other news, Japan seems to be on the same page as the U.S. regarding monetary policy easing. In a parliamentary committee meeting, BOJ governor Maasaki Shirakawa talked QE, saying that if necessary, they may consider “steering monetary policy by making further use of the fund.” Of course, the fund he is referring to is the 5 trillion JPY asset-purchase fund the government plans to use to boost the economy.
Also, Japan asked China to “act responsibly” regarding exchange rates, hinting at the China’s “artificially” weak currency. Wait a second… Isn’t Japan itself guilty of directly intervening in the markets to weaken the yen?? In the BOJ’s defense, Prime Minister Kan said that their interventions were to protect themselves from harmful volatility rather than setting the yen at a particular level.
No reports on tap for today. In the meantime, watch your TVs closely as Japanese officials may give unexpected word about future policy moves!
The yen continued its Pipzilla performance on the charts as it tapped its 15-year high against the dollar at 80.89. Rawr! USD/JPY then inched higher to close the day 29 pips higher at 81.47.
It seems like the [BOJ](http://www.babypips.com/forexpedia/Bank_of_Japan) isn’t happy though with Finance Minister Noda and Economics Minister Kaida talking about the yen’s strength weighing on the economy. Probably making them more upset is the disappointing CGPI report, suggesting that [deflation](http://www.babypips.com/forexpedia/Deflation) is still present. The central bank reported that the prices of goods sold by corporations declined by 0.1%, when the market expected it to have been flat during September.
Yikes!
You may want to tune in to the industrial figure for August, which is due later at 4:30 am GMT. Analysts are expecting no revision on the final reading, with the forecast seen to reveal that industrial activity declined by 0.3% during the month. However, if the report reveals a downgrade, that could be another reason for the BOJ to pull the [intervention](http://www.babypips.com/forexpedia/Central_Bank_Intervention) trigger once more.
So it seems that the yen has just posted new highs against the dollar. Yawn… what’s new? USD/JPY once again dipped below the 81.00 handle, before rising back up to close at 81.41 to end the week.
Last Friday, BOJ Governor Masaaki Shirakawa once again expressed concerns regarding the strength of the yen, indicating that it is hurting Japan’s export industries. That, along with weakening demand from other major economies, does not bode well for the our buddies over at Tokyo.
Hmmmm… Another round of currency intervention perhaps? Well, if you ask me, probably not this week! We’ve got G20 meetings at the end of the week, and with all the buzz about a “currency war”, I doubt that we’ll see the BOJ intervene this week.
Looking at our economic calendar, the tertiary activity index was just released, coming in slightly better than expected. The report was expected to show a dip of 0.5% in how much companeis pay for services in the month of August. Instead, the report showed a small decline of just 0.2%.
No other news coming out for the rest of the week, but you should still be on the lookout for news from other countries, as they might could prove to be catalysts for sparks of volatility in the market.
Jamie Foxx wasn’t the only one singing, “You know you lookin’ at a winner!” yesterday. The yen posted its own victory up on the charts, too! Helped by better-than-expected tertiary industry activity data, the yen rose above the weakened USD once again. USD/JPY started the week off by heading south and hasn’t turned back since. It closed 25 pips lower for the day at 81.18.
Late Sunday night, while you were all probably still asleep, Japan’s METI tertiary activity index hit newsstands. The results were, put simply, not so bad. Many had expected a 0.5% downtick following the 1.6% uptick that August recorded. Instead, investors were relieved to see that the index only fell 0.2%.
Does this mean the economy isn’t as fragile as many think it is? Well right now, Japan is still battling anemic domestic demand, and the yen’s rise has been taking its toll on foreign demand. But as this report measures spending in the services sector, it gives us clues as to how the labor market and consumer spending will fare in the future.
No high-tier reports for today, which could mean that the yen is destined for new heights. But as it climbs higher and higher up the charts, you have to wonder how much longer the BOJ will allow it to appreciate and harm its exports.
