Like Robert Downey Jr.’s latest movie “Due Date,” the yen received mixed reviews. While it was sold off against the Greenback, it was bought up against most of the other major currencies. USD/JPY closed 10 pips higher for the day at 83.30 while EUR/JPY dropped in the New York session to land 51 pips lower for the day at 112.37.
Once again, we’re seeing signs of risk aversion in the markets. In times like these when risk appetite is weak, the yen tends to gain ground though the Greenback reigns supreme.
Concerns over Ireland’s debt problems are still fresh on the minds of investors. They have even more to worry about now that South Korea has decided to raise interest rates. They fear China may follow suit with a rate hike and cause an economic slowdown domestically and internationally. Naturally, investors moved away from “riskier” assets and flocked back into the arms of safe haven assets such as the yen.
Since Japan isn’t releasing any reports today, it’s best to stay sharp and be on the lookout for any new developments that may affect risk sentiment.
Consolidation, consolidation, consolidation! The absence of high-profile economic reports kept the yen stuck within a tight range against other major currencies in yesterday’s trading session. USD/JPY, for one, ended the U.S. session day at 83.32, 2 measly pips higher from its opening price during the Asian session.
Today will be another uneventful day for Japan, so pay attention to data from other major economies, particularly from those from the U.S and euro zone. News from them will be the ones to determine where the yen is headed today!
Stay sharp folks!
Double whammy for the yen! Improved risk appetite, combined with a weak outlook for the Japanese economy, clobbered the yen in yesterday’s trading. At the end of the day, the yen coughed up most of its gains to its major counterparts.
Japan’s leading index for September was revised 0.3 points lower, reflecting weaker prospects for economic growth. This was accompanied by the government’s economic assessment saying that the recovery is likely to remain weak for a long while. In fact, in their monthly economic report, the Japanese Cabinet downgraded their estimates for consumer spending, imports, and industrial production. Still, they believe that Japan’s job market has shown improvement and will continue to do so.
For today, Japan is set to release its All Industries Activity index for September. After printing a 0.4% decline in the previous month, the index is expected to churn out a slightly larger drop for September. A weaker figure might be in the cards since the Tertiary Activity index, which was released earlier this week, came in way below consensus. Keep an eye out for the actual release at 4:30 am GMT.
Let’s call it a draw! Despite disappointing economic data, the yen was able to squeeze out a draw against the Greenback as USD/JPY was practically unchanged at 83.47 after Friday’s trading. Unfortunately, it didn’t do as well against the euro as risk appetite in the region improved and sent EUR/JPY up 44 pips to 114.24.
The only report to come out of Japan last Friday was the METI all industry activity report. September printed below expectations of a 0.6% decline when it showed a 0.8% decrease in the level of production in all industry sectors. The only silver lining was that the previous month’s 0.4% downtick was revised upward to just 0.2%. But as you can see, the recent figures are still nothing to celebrate over and should be reason for concern.
Up ahead, it looks like we’ve got a pretty chill week.
Tomorrow is a banking holiday as the Japanese celebrate Labor Thanksgiving Day, so expect light trading during the Tokyo session.
After the one day vacation, we take a look at the most recent trade balance figures. Forecasts are for a trade surplus of 870 billion JPY, up from 800 billion JPY. However, the yen’s recent strength presents a downside risk to exports and could result in a worse-than-expected figure. Drink coffee, stay awake, and stay sharp when the report comes out late Wednesday night at 11:50 pm GMT.
Then at 11:30 pm GMT on Thursday, core CPI figures will be available. The city of Tokyo is expected to continue experiencing a 0.5% decrease in prices in November after seeing the same year-on-year decline last month. On a national level, the decrease in prices is anticipated to soften from last month’s 1% year-on-year drop to just 0.5% this month. Japan has been battling deflationary threats, so expect to see a bit of movement on the charts if we get an upside surprise.
Numero uno, baby! The yen was on top of the world yesterday as risk aversion wiped out all its counterparts. USD/JPY, together with the other major yen crosses, took a spill and fell from 16 pips from its opening price of 83.27.
The yen has been benefiting from the recent wave of risk aversion caused by debt problems in the euro zone. In fact, it strengthened so much yesterday that it also uncharacteristically beat the USD, which is arguably the king of risk aversion.
Expect trading during the Tokyo session to be thin today as the Japanese will be on vacation celebrating Labor Thanksgiving day. But don’t be sad! This might present a good opportunity to play a breakout later in the day.
Thanks to risk aversion, traders found the yen the sexiest among the majors and made it the Ryan Reynolds of yesterday’s trading. In fact, it was so sexy that it even gained 10 pips at 83.17 against the dollar, which is also considered a safe haven currency. Holler! The yen bagged the most from the euro when EUR/JPY closed 224 pips lower at 111.20.
Despite the lack of hollers from Japan yesterday, political tensions between North and South Korea was enough to send traders in hot pursuit of the safe haven currency. It also helped that Europe’s sovereign debt woes are still in vogue.
But along with keeping tabs on [market sentiment](http://www.babypips.com/school/what-is-market-sentiment.html), make sure you also pay attention to the economic reports we have on deck today.
At 11:50 pm GMT, we’ll have the [trade balance](http://www.babypips.com/forexpedia/Trade_Balance) figures for October with the consensus forecast of an 870 billion yen trade surplus. The [Bank of Japan](http://www.babypips.com/forexpedia/BOJ) will then release its CSPI report for the same month and analysts are expecting to see a 1.1% decrease in the general price level of services purchased by corporations.
Note that better-than-expected figures will probably help the currency rally. Good luck!
Win big, lose big! After chalking up large gains from risk aversion flows on Tuesday, the yen decided to give back its winnings as it lost against all of its major counterparts. USD/JPY closed 42 pips higher at 83.59 while EUR/JPY bounced from a two-month low of 110.32 to finish 24 pips higher for the day at 111.45.
Risk appetite has never been the yen’s friend. Boo! Once again, sellers abandoned it in search of higher-yielding assets as risk sentiment improved yesterday.
Early this morning, we got a taste of Japanese economic data. Unfortunately, they were all negative!
Japan’s trade balance fell short of forecasts for a 871 billion JPY surplus and posted just 820 billion JPY in October. Making matters worse, export growth was just at 7.8% last month, far below the expected 10.7% and almost half the record of September. Has the yen’s appreciation finally taken its toll on the export industry? It has, after all, gained over 11% against the Greenback this year.
In addition, the CSPI report, which measures the change in prices of services bought by corporations, dropped by 1.2%. October’s figure is below forecasts and the previous month’s record, which were both pegged at a decline of 1.1%. Obviously, such a negative price pattern does nothing to alleviate fears of deflation.
Later today, we see exactly how inflation is faring in Japan. The CPI report is due at 11:30 pm GMT, son! The report is expected to show a 0.6% year-on-year decline in prices, which is slightly better than the 1% we saw last month. Let’s see if any unexpected results can get the yen moving!
Cease fire! Yen bulls and bears decided to call it quits yesterday as USD/JPY hardly moved from its opening price of 83.59. With no data to trade and U.S. traders celebrating Thanksgiving, USD/JPY was practically lifeless!
The economic data only started flowing a couple of hours ago, when Japan released its CPI figures for November. Unfortunately, they didn’t bear good news.
As expected, prices of goods and services dropped 0.6% on a national level, following the 1.0% decrease last month. In Tokyo, results were worse than expected as CPI reported a 0.5% decline, below forecasts for a 0.4%. Clearly, Japan still has reason to fear deflationary threats.
Nothing more to see from Japan today. But keep an eye on yen crosses, as they can be very volatile and are currently in prime position to break out!
Risk aversion got the yen skyrocketing against its higher-yielding counterparts but not against the dollar, nuh-uh! USD/JPY opened at its intraday low of 83.60 and went on an uptrend to end the week 51 pips higher at 84.11.
Economic hotshots say that the yen’s loss against the dollar reflects the ongoing conflict in the Korean peninsula and Japanese economy’s struggle against deflation.
On annual basis, the national CPI report for November came in at -0.5% while Tokyo’s version printed at -0.6%. Although the actual figures were what the markets braced for, the decline in consumer prices has gotten more than just a handful of traders worried.
Making matters worse for the yen is the retail sales report for October that showed a 0.2% decline and missed the 0.7% uptick that analysts had predicted. Yikes!
But not all hope is lost! If today’s roster of economic reports wow the markets, the yen may just be able to stage a comeback against the dollar.
At 11:30 pm GMT, the unemployment rate for October is expected to clock in at 5.0% while household spending is seen to have increased by 0.4% during the month. To be released along with those reports is the preliminary industrial production report for October. Analysts aren’t keeping their hopes up though. The consensus forecast is down to -3.2% following its previous -2.6% reading.
Although the yen managed to stage a magnificent performance against the euro, the yen found itself holding the short end of the stick versus the pound and the dollar. By the end of the U.S. trading session, the yen was able to post a 100-pip win against the euro, while it suffered a 30-pip loss to the pound and the dollar.
It looks like the mixed trading was driven by how data came out… On the one hand, the report on industrial production came in better than expected, printing a 1.8% decline only, lower than the 2.8% drop initially expected. On the other hand, the report on unemployment showed that joblessness increased in October to 5.1% from 5.0% in September.
Today will be a light day for Japan, as only the report on housing starts is due for release. It is slated to show a 10.0% gain year-on-year, which is lower than the 17.7% increase seen the month before.
I don’t expect the report to have much of an effect on price action though, as it hardly did in the past… The focus of traders is also on the debt situation in euro zone, so developments in that region will be the ones to keep an eye and ear open for!
Thanks to risk aversion that stemmed from debt contagion fears in the euro zone, the yen turned out to be one of the favorites yesterday. It outperformed the euro, the Aussie, the pound, and yes, even the dollar! After it had hit a 2-month high at 82.41 on Monday, USD/JPY fell back down to 83.67. At the same time, EUR/JPY found itself dropping to 109.71, its lowest level in since early September.
As I’ve said yesterday, the market focus remains on the euro zone debt situation, particularly Ireland’s, which means traders will be putting their investments in countries that they perceive as safe… Japan is such a country, so expect the yen exhibit some strength in the coming days!
According to the forex economic calendar, only one piece of data is scheduled for release today from Japan. At 11:50 pm GMT, Japan will publish the capital spending report for the second quarter of 2010. The report, which measures the CHANGE in the capital expenditure made by businesses, is expected to show a rise of 6% after the previous quarter’s disappointing 1.7% drop.
Similar to the housing starts report yesterday, the capital spending report will probably NOT have a huge impact on price action… at least that’s how it has been in the past.
For now, it’s all about risk sentiment, whether traders are feeling afraid or optimistic… Let’s see if risk aversion will be able prop up the yen again today, shall we?
After USD/JPY bottomed at 83.38, the dollar started to choke-slam pips out of the yen until the pair closed the day 47 pips higher at 84.17. The Asian currency also got its butt kicked by the euro, losing 193 pips yesterday as EUR/JPY parked at 110.58.
What kept the yen from being the FX hood’s almighty rikishi?
A few market whiz kids think that China’s manufacturing PMI and Germany’s retail sales caused the reversal in market sentiment from risk aversion to risk appetite.
But earlier today, the yen showed a bit of swagger when the third quarter Capital Spending report posted its first increase in more than three years with a 5.0% uptick!
See if the yen will be able to keep up its rally given that the figure missed the 6.0% forecast. Gauge market sentiment and keep in mind that the safe haven currency usually gains amid risk aversion.
The yen’s scorecard in yesterday’s trading was as mixed as the reviews for Spiderman: Turn off the Dark! It erased some of its losses against the dollar as USD/JPY closed 28 pips lower at 83.89. On the other hand, it took another beating from the euro when EUR/JPY ended the day 36 pips higher at 110.93.
Without any economic data to support it, the yen was left vulnerable to market sentiment. Its win against the dollar might be a reflection of the market’s disappointment on the worse-than-expected U.S. unemployment claims report. As for the losses it incurred against its higher-yielding counterparts, risk appetite is probably to blame.
So with our economic calendar still blank for reports coming from Japan, you may want to get a feel of the market’s mood before you enter your trades. Take note that the high-caliber NFP report is due later.
Yen bulls attaaaaack! The currency bulls ditched the dollar for the yen last Friday after the NFP report in the U.S. showed disappointing numbers. USD/JPY plummeted by 118 pips to 82.71. Meanwhile, EUR/JPY only closed a pip lower at 110.93 after dropping to its intraday low of 109.89.
No reports were released from the Land of the Rising Sun last Friday, but be sure to check out the other big reports coming your way this week! The core machinery orders tomorrow at 11:50 pm GMT is expected to ease its decline to only a 0.5% slip from its 10.3% fall last September, while the final GDP numbers for the third quarter on Wednesday at 11:50 pm GMT is slated to show a 1.0% growth from its 0.9% preliminary figure.
On Thursday at 11:50 pm GMT we’ll see the BSI manufacturing index report, and a number higher than its 13.3 figure in the second quarter could mean that more large manufacturers are getting optimistic on the economy.
Lastly, we’ll get hold of the household confidence report on Friday at 5:00 am GMT. Analysts are expecting a rise to a 42.3 index number in November, but watch out for any surprises!
Good luck in your trades this week, kiddos!
After rallying to its intraday high of 83.00, USD/JPY dropped like it was hot to 82.57. Too bad for the yen, the bulls still had enough energy left to push the pair to 82.67, giving it a 1-pip loss. Bummer, huh?
The lack of economic hollers from Japan might have cost the yen a win against the Greenback yesterday. But worry not yen bulls! Because with the handful of data on tap for it today, it may just be able to erase its loss!
First up is the leading indicators report for October at 5:00 am GMT. The index is expected to come in at 97.3 which is a tad lower than its previous reading of 98.6. A figure better than the forecast will probably have a bullish effect on the currency as this would indicate that analysts are expecting the Japanese economy to show some hustle in the coming months.
Then at 11:50 pm GMT, key machinery orders for October will be released. But judging by the -1.0% consensus, it looks like economic gurus aren’t keeping their hopes up. Yikes!
Along with that will be the current account balance for the same month with the market expecting to see a 1.48 trillion yen surplus. The M2 money supply report for November will also be on tap with a 2.7% forecast indicating that there is no change in the quantity of money circulating in the economy from the previous month.
Aside from staying tuned for the reports, make sure you get a feel of market sentiment before you lock and load your pips on the yen. Remember that the currency usually rallies in times of risk aversion. Good luck!
With one disappointing report printing after another, it wasn’t much of a surprise to see USD/JPY skyrocket past the 83.00 psychological handle and land at 83.47 at the end the day. The yen lost 87 pips to the dollar yo!
Let’s take a look at yesterday’s lineup, shall we?
The negative vibes started with the leading indicators report for October which came in at 97.2 versus the 97.3 consensus. It was then followed by the current account report which showed that foreign demand for the yen was lower at 1.46 trillion yen in October than the 1.55 trillion yen account surplus that the market was eyeing.
Lastly, we saw that machine orders placed with manufacturers continued to fall in October. The Core Machinery Orders report printed a 1.4% decline when the analysts had estimated it to have been flat during the month to follow its -10.0% reading in September. Yikes!
See if the Economy Watchers Survey for November and the final reading of Japan’s third quarter GDP will be able to help the yen recover against its safe haven counterpart.
A less pessimistic outlook on consumer spending is expected with the Economy Watchers Sentiment index projected to come in at 42.1, higher than its 40.2 figure in October.
Then at 11:50 pm GMT, the market is anticipating to see an upward revision to 0.8% in the third quarter GDP from its preliminary reading of 0.7%.
Risk aversion may also help the yen rally against its higher-yielding counterparts so make sure you get a feel of the market’s mood!
Drats! The positive consumer sentiment report from Japan wasn’t enough to put enough shine on the yen yesterday as the markets focused on the upsetting core machinery orders and current account reports. USD/JPY rose by 52 pips at 84.04, while EUR/JPY climbed by 57 pips to 110.43.
The economic watchers sentiment report released yesterday showed an increase to a 43.6 index figure from October’s 40.2 number. The data is still on the pessimistic zone, but hey, an improvement is an improvement, right?
The final GDP headline for the third quarter released a couple of dumbbell reps ago also printed in the green territory as it showed a 1.1% increase from the 0.9% preliminary figure on awesomer-than-expected increase in capital spending. Will the uptick be enough to catch the currency bulls’ attention?
Today will get hold of the preliminary machine tool orders report for November at 6:00 am GMT. The change in the value of orders placed with machine tool manufacturers grew by 71.0% in October, but a higher number could bring the pip-love back to the yen.
The BSI manufacturing index will also be released today at 11:50 pm GMT. This survey is usually used to predict the Bank of Japan’s big Tankan survey, so watch closely for any improvement from the 13.3 figure in the third quarter!
The last to hit the pip stage is the change in the price of goods sold by corporations. The data rose by 0.9% in October, so a higher number could help ease the yen’s losses yesterday.
Don’t let these reports take a toll on your trades!
Why hello there risk aversion! How nice to have you back! Yesterday, the yen had a huge smile on its face as traders sought it in favor of other higher-yielding currencies. By the end of the U.S. trading session, the yen was trading higher against all major currencies… yes, even against the mighty dollar.
Apparently, the primary cause of the rally was the news that Fitch, a credit rating agency, downgraded Ireland’s sovereign credit rating to BBB+ from A+. But as if nobody expected that…
In other news, the BSI manufacturing index came out with a very disappointing figure. It printed a reading of -8, opposite the 14.3 reading initially expected.
Today’s economic calendar presents very little to worry about for Japan as only the consumer confidence survey is due. Historically, the survey has had very little effect on price action, so I don’t expect it to create any later either. In any case, the survey is expected to print a reading of 42.3 for November, slightly higher than October’s 40.9.
What a snoozefest! The absence of “real” economic data from Japan kept price action relatively calm last Friday. USD/JPY ended the day at 83.92, barely changed from its opening price of 83.70. EUR/JPY traded in a similar rangebound fashion, closing the day at 111.05, which was merely 23 pips higher from its opening price.
It looks like the lower level of liquidity brought by the arrival of the holidays is finally getting to the currencies! Trading usually dies down during this time of the year because big traders go on vacation and banks and other financial institutions close for an extended period of time. Also, with all the bad news from Europe already priced in the market, we’ll probably see currencies trade flat until after New Year…
Still, despite the lower liquidity, it’s best to keep an eye out for potentially market moving data this week…
Looking at Japan’s economic calendar, I only see the Tankan manufacturing survey as the possible event risk. Scheduled for release on Friday, the survey is expected to print a reading of 3 for the second quarter of this year, which is 5 points lower from the previous quarter’s reading. This means that while conditions in the manufacturing sector are have probably gotten better, the pace has slowed down. This could be bad for the yen!
With the lack of economic report in the Land of the Rising Sun yesterday, the yen took a chill pill and went with the flow of risk appetite in the markets. It gained 51 pips on the Greenback and 37 pips on the pound, but lost 76 pips on the euro.
Much of yesterday’s risk appetite stemmed from China not increasing its interest rates despite the onslaught of inflation-friendly economic data. Traders breathed a sigh of relief at the reprieve, and pushed higher-yielding currencies higher.
It looks like it’s Japan’s turn to make headlines today! The big Tankanmanufacturing index report is due at 11:50 pm GMT. The survey on 1,200 large manufacturers will tell a lot about Japan’s manufacturing industry, so an index figure lower than 8, third quarter’s figure, might attract more yen bears.
Meanwhile, a report on the total value of services purchased by businesses will also be released at 11:50 pm GMT. The data is expected to print a 0.3% increase in October, but keep an eye out for any surprises!