If I were to sum up the yen’s movement yesterday in one word, I’d pick directionless! Due to the absence high-profile economic data from Japan, the yen found itself trading in tight ranges versus other major currencies yesterday. USD/JPY, for instance, had gone as low as 80.70 from its day open at 81.03 only to find itself right where it began at the end of the U.S. trading session.
We won’t be seeing anything from Japan again today, so pay attention instead to data coming out from the U.S. If the U.S.'s consumer price index and preliminary University of Michigan consumer sentiment survey menages to beat the market expectations, we could see risk appetite pick up and hurt the yen.
The yen shuffled on the charts last Friday like my home boys from LMFAO! It scored a win against each of its major counterparts, bagging the most pips from the euro when EUR/JPY ended the day 117 pips lower at 113.98. Against the dollar, it only scored a modest 8-pip gain. Hey, a win is a win, right?
Our economic calendar was blank for reports from Japan on Friday. But thanks to risk aversion and not-so-impressive inflation data from the U.S., the yen was able to party rock on the charts.
I wonder how the currency will perform this week given that we have more high-caliber economic data from The Land of the Rising Sun to sink our teeth into. We started earlier today with the Core Machinery Orders report for February which printed a 2.9% growth and topped expectations which was for a 9.7% decline. Later, at 5:00 am GMT, we’ll have the household confidence report for April which is seen to be slightly lower at 37.3 than last month’s 38.3 reading.
On Wednesday, at 11:50 pm GMT, the Tertiary Industry Activity index will be released. Don’t get your hopes up too much for this one though. The change in the value of services that businesses bought in March is seen to have dropped by 5.4%.
Come Thursday, we’ll have the GDP report for Q1 2011 due at 11:50 pm GMT. Economic growth is seen to have contracted by 0.5% during the quarter, following the -0.3% reading for Q4 2010. A negative report wouldn’t really be much of a surprise as it would reflect the negative effects of the natural disasters that hit Japan.
We’ll then wrap up the week with the BOJ interest rate decision on Friday at 12:00 am. I’d keep an ear out for what the BOJ has to say if I were you. With the yen’s recent rally on the charts, I wouldn’t be surprised to hear a little jawboning here and there.
Aww yeah, DJ Yen mixin’ it up! The yen posted mixed results on the charts after posting equally mixed economic data. While USD/JPY edged 10 pips lower to 80.76, EUR/JPY climbed 73 pips up to 114.54.
First, the good news! Japan stunned traders when it printed its core machinery orders for the month of March. With everyone anticipating a pessimistic 9.7% decline, March’s results caught everyone completely off guard as it printed a solid 2.9% increase.
Core machinery orders received a nice boost from the way companies quickly scrambled to repair their facilities. As a matter of fact, at this rate, they say Japan’s manufacturing should be returning to pre-earthquake production sooner than expected! Finally, a bit of good news for Japan!
On a sadder note, it seems households are still feeling down in the dumps. The household confidence index ticked down from 38.3 to just 33.4 in April, far worse than the 37.3 reading that was initially expected. Keep your heads up, my Japanese brothers!
The only report coming out today is the tertiary industry index, which is slated to show a 5.4% decrease following February’s 0.8% rise. But since this data won’t be available until 11:50 pm GMT, I suggest you monitor risk sentiment in the meantime, since y’all know how the yen loves to boogie to the beat of risk!
Party’s over yen
played the party-pooper yesterday with his pessimistic comments on the economy, sending the yen into the bear lair. It lost 62 pips to the dollar when USD/JPY closed at 81.37 and 121 pips to the euro when EUR/JPY ended the day at 115.74.
In a statement yesterday, the head honcho of the BOJ said that the tsunami and earthquake left the economy in a “very severe” state. He admitted to the Parliament that the economy seems to be losing its strength and that deflation remains to be a problem. Yikes!
Not surprisingly, a few naysayers have bet that their two cents that the central bank would extend its loose monetary policy even more.
I don’t think the Tertiary Industry Activity index for March will soothe investor fears either. It showed that the total value of services bought by businesses contracted by 6.0% during the month which was more than the 5.4% decline that the market braced for.
Later tonight we’ll have Japan’s GDP report for the first quarter of the year. It is anticipated to print at -0.5%. If the forecast is right, that would translate to three consecutive quarters of negative growth for Japan and push the country back into recession again! Uh oh… Tune in to that at 11:50 pm GMT!
The yen’s price action yesterday was like watching a car make a perfect U-turn! The yen rallied early in the Asian trading session but it was unable to sustain the move and actually gave up ALL of its gains – and then some – by the end of the U.S. trading session! If you look at the chart of USD/JPY for instance, you’ll see that the pair dipped to 80.94 and then it suddenly spiked up to 81.82!
What caused the yen to act that way?
The yen initially gained due to Merger & Acquisition talks in Japan. Remember, whenever a foreign company wishes to merge or acquire a company in Japan, it must first convert the money it will use in its deal to the local currency, which is the yen. Then, in the latter half of the day, the yen gave up all of its winnings as companies posted higher profits and inspired a slight case of risk-taking.
The only data of interest that was released was the preliminary GDP report of Japan. It showed a 0.9% decline, which means that the country has officially plunged back into recession. While it was bad news, it wasn’t a surprise to anyone. The earthquake took a heavy toll on Japan’s economy, and it’s going to take a while for it to get back on its feet.
Nothing on Japan’s forex calendar today, but that doesn’t mean the yen won’t be seeing any action! A bunch of important data will be coming out of the U.S., which may indirectly affect the yen’s price action.
With traders being slightly risk hungry, the yen lost out in yesterday’s trading showdowns. Yen crosses rose across the board, led by EUR/JPY, which closed 39 pips higher for the day.
Now that Japan is officially back in a recession, I’m curious to see what the BOJ is gonna do. Some believe that the central bank may have no choice but to introduce more stimulus into the economy to help it get back on its feet. The BOJ will be releasing its monetary policy statement soon – let’s see what happens!
For now, it seems as if the markets have yet to price in any additional stimulus. So if the central bank decides to inject more cash into the system, it may send the yen lower!
Did the yen really win? While it was able to post a solid gain versus the euro, the yen was barely changed against other major currencies by the end of the U.S. trading session. USD/JPY, for instance, closed Friday at 81.68, a mere 16 pips higher from its opening price that day.
The yen’s rally over the euro was mostly because the continued concern of investors on euro zone’s debt crisis. Apparently, Bundesbank, Germany’s central bank, warned the market Greece’s bonds would become ineligible as collateral if they change the terms of their debt and extend their maturity. Against other currencies, the yen pretty much traded sideways due to the absence of important economic data.
This week, Japan’s forex calendar hardly presents anything substantial. There’s the trade balance on Wednesday and consumer price index on Friday, but those reports hardly create an impact on the market. That beign said, keep a closer eye on data coming out of other major economies, particularly the GDP report from the U.S.
“[I]Oh, no… This is risk aversion isn’t it?[/I]” The currency bulls probably felt like Thor as they charged the yen higher against its major counterparts on a round of risk aversion in markets. Though no big report was released yesterday, EUR/JPY dropped 33 pips to 115.20 while GBP/JPY fell 60 pips to 132.13.
Just like last Friday, sovereign debt concerns in the euro region weighed on risk appetite and markets, which pushed currency bulls to low-yielding assets like the franc, yen, and the Greenback
But don’t get too excited over the yen! Word around the street is that Japan’s economic reports are beginning to show the effects of this year’s natural calamities in the country. For one, Japan’s leading index slipped for the first time in five months. What’s more, supermarket sales in April reflected decreasing consumer optimism as it declined for the first time in three months.
With that said, make sure you keep close tabs on risk sentiment and any other news in markets. Japan won’t be releasing any economic report today, so stay on your toes for news from other economies!
Easy there fella! It looks like the yen had too much sake in yesterday’s trading, looking so lost in the charts. While it managed to sneak an 8-pip win against the dollar when USD/JPY closed at 81.93, it gave up 39 pips to the euro, ending the day at 115.20.
Without any economic report on tap from Japan, it looks like the yen just moved according to market sentiment. So without any market-moving data left on tap for the currency today, it may be best for you to be on your toes for any changes in the market’s mood.
Earlier today, the minutes of the most recent BOJ meeting and the trade balance report for April were released.
The minutes didn’t present anything new that we didn’t hear from the BOJ statement last April 28. It showed that bank members agreed on keeping the ultra-easy monetary policy in place. However, there was one member who said that further stimulus is needed.
On the other hand, the trade balance report showed that imports outpaced exports by only 500 billion JPY in April, beating the forecast which was for a 590 billion trade surplus.
Once again, the yen’s price action was mixed as one of Happy Pip’s mocktails when it gained on the euro and the franc, but lost to the dollar and the pound. GBP/JPY closed 78 pips higher at 132.43, while EUR/JPY slipped by 15 pips to 115.44. Here’s why.
In a perfect world markets would probably react to economic data predictably. For example, when Japan’s trade balance report showed the FIRST TRADE DEFICIT IN 30 YEARS, they would probably sell the yen like there was no tomorrow. Heck, Japan’s trade balance slipped from a surplus of 189.4 billion JPY in March to deficit of 463.7 billion JPY in April! It’s no wonder my caps lock got stuck!
But we can’t always see the Lakers in the finals, Nutella isn’t available in gallons, and our markets is far from perfect. Traders paid more attention to risk aversion than Japan’s economic data, so the yen managed to gain against some high-yielding currencies.
The day’s not over though, as Japan just released a better-than-expected report on the price of services bought by companies. Will this have a significant impact on the yen, or will risk appetite continue to set the beat of its price action?
Put the “Yeah!” in yen! The Japanese currency managed to end higher against most of its rivals, except for the Aussie and Kiwi. USD/JPY dropped from its 81.96 open price to close at 81.35 while EUR/JPY ended right at the 115.00 handle. Find out where the yen is headed today.
Yen pairs consolidated during the earlier parts of the day as traders eagerly awaited the release of Japan’s inflation data. The Tokyo core CPI missed expectations and printed a mere 0.1% annual uptick in price levels while the national core CPI came in line with the consensus and showed a 0.6% increase.
What gave the yen a boost towards the end of the day was their retail sales report, which came in stronger than expected. On an annualized basis, retail sales fell only 4.8% in April instead of the estimated 6.1% decline. On top of that, the March figure was revised upwards to show a 8.3% drop instead of the 8.5% decline initially reported. Not bad considering the negative impact of the March 11 quake!
Japan won’t be releasing any economic figures today so make sure you keep tabs on market sentiment to figure out whether the yen could catch more gains!
The yen’s price action against other major currencies last Friday was as mixed as bag of Trail Mix! The yen was able to close the U.S. trading session higher versus the dollar, but fall against everything else. EUR/JPY, for instance, ended Friday 51 pips higher at 115.51.
Data from Japan was mixed as well. The Tokyo Core CPI came in with a 0.1% rise, slightly worse than the 0.2% increase initially predicted. The retail sales report, on the other hand, dropped only 4.8% instead of the 6.1% decline the market expected.
This week, we’ve got a couple of economic reports coming out of Japan like the report on household spending and preliminary industrial production on Tuesday, but they don’t really have a huge effect on price action. Keep an eye instead on the upcoming high-profile reports from the U.S., as they will be the ones that will move the yen.
The Japanese yen couldn’t seem to find its “inner peace” yesterday as it gave a mixed performance against its major counterparts. Despite the absence of U.S. traders, the yen lost ground to the U.S. dollar as USD/JPY closed a few pips shy of the 81.00 handle. The yen managed to outpace the euro but it stayed flat against the pound. How will it fare today?
Just a few hours ago, Japan released its manufacturing PMI which climbed from 41.7 to 51.3 in May. Since the reading is now above the 50.0 mark, it indicates that the Japanese manufacturing industry is expanding again.
While the PMI report was good news for the yen, the household spending, industrial production, and unemployment rate figures weren’t so upbeat. Household spending reportedly dipped by an annualized 3.0% in April, possibly a result of the March 11 quake’s damage. Meanwhile, joblessness climbed from 4.6% to 4.7% during the same month. Industrial production posted a mere 1.0% increase for April, less than half the projected 2.6% climb.
Today Japan is set to release its average cash earnings and housing starts reports. After dropping by an annualized 0.1% in March, average cash earnings are expected to dip by 0.2% in April. Housing starts are estimated to show a 3.0% decline for April, following the 2.4% drop seen last March. Watch out for the actual average cash earnings figure due 1:30 am GMT and the housing starts data due 5:00 am GMT because worse than expected figures could trigger yen selling.
Sell, sell, sell! The yen was taken deep into the bear lair yesterday as sellers went crazy after Moody’s threatened to downgrade Japan’s credit rating. When the dust finally settled, USD/JPY found itself 58 pips higher while EUR/JPY ended 172 pips higher.
Moody’s couldn’t have chosen a better name for its credit rating agency. Yesterday, it showed us exactly how moody it can get when it announced that it will be putting Japan’s debt rating on review for a downgrade! Moody’s cites the economy’s grim outlook and weak policy response as the reasons behind its decision to put Japan on downgrade watch.
The yen also had to battle weak economic data yesterday. Hey, when it rains, it pours!
Japan’s household spending fell below expectations as it printed a 3.0% decline (versus a 2.7% decrease) following the previous month’s 8.5% drop. Adding to the heartache, Japan’s unemployment rate rose from 4.6% to 4.7% in April. And to top it all off, its industrial production also disappointed, showing a mere 1.0% increase instead of the 2.6% that markets had expected.
Phew! What a bummer! I wonder what BOJ Governor Shirakawa has to say about all this as he’s due to speak sometime today. If he dishes out a few dovish words and gives hints about a looser policy, it could lead to further losses for the yen. Stay tuned, kids!
Hiyaaah! The yen might be no Kun Fu Panda’s Po, but it can certainly kick butt in the charts! Risk aversion turned out to be the yen’s ally as traders dumped the high-yielding assets in favor of the yen. For one, EUR/JPY finished the day with a 128-pip drop to 116.03, while USD/JPY also declined by 61 pips to 80.91.
Don’t get your hopes up too high for the yen though. Word on the street is that Japan’s Prime Minister Naoto Kan is in hot water as some of his own party members are threatening to back a no-confidence motion this Thursday. The loss of love is probably due to the lack of government action on the nuclear and economic crises.
The silver lining in this very dark cloud is that Japan’s housing starts showed a bit of improvement in April, inching higher by 0.3% compared to a 2.4% drop in March. Meanwhile, Japan’s capital spending numbers also rose by 3.3% in the first quarter when markets only pegged the number at 3.2%.
No other reports are scheduled for release today, so keep close tabs on risk appetite to see if the yen manages to post more gains!
Come out, come out wherever you are yen! The Asian currency seemed M.I.A in yesterday’s trading, losing 121 pips to the euro at 117.25 and ending the day unchanged against the dollar at 80.92.
I think the yen wasn’t able to strut the charts despite positive data because risk appetite picked up. Remember that the currency usually rallies in times of risk aversion.
Japan’s capital spending report for the first quarter of 2011 topped expectations by 0.1% when it printed at 3.3%.
Perhaps Prime Minister Naoto Kan’s resignation also rattled the yen bulls. He was able to survive a no-confidence vote yesterday only because he pinky swore that he would step down when the country recovers from the earthquake.
Take note that Japan is already near its borrowing limits and a leadership change could only delay efforts in keeping the country’s balance sheets from going down the dumps. Yikes!
Today we don’t have anything on our forex calendar for the yen, but keep tabs on the reports due to be released for its counterparts. Good luck!
“Om-nom-nom-nom!” went Yen traders as they got their grub on and gobbled up the Japanese currency last Friday. The markets just couldn’t resist it because it looked so darn delicious in light of the U.S.’s weak employment data. The yen beat out almost all of its major counterparts as USD/JPY tumbled 68 pips to 80.24.
Will the yen continue to benefit from safe haven flows this week? With how light Japan’s economic calendar will be, it might not have a choice but to follow risk sentiment!
The only heavy piece of data coming from the Land of the Rising sun is the final GDP due at 11:50 pm GMT on Wednesday. Analysts revised their estimates for GDP growth from a 0.9% decline to a decrease of just 0.8%. Yeah, it’s nothing to go nuts over, but with the way its economy has been performing, I bet Japan will be happy to see ANY form of improvement!
After that, at 11:50 pm GMT on Thursday, Japan will roll out its tertiary industry index, which is slated to show a 2.8% growth following the previous month’s 6.0% decline. Better-than-expected results from this bad boy probably won’t cause too much action, but it might be enough to spark a mini-rally if it posts a figure much higher than expected.
Even though Japan didn’t release any economic figures yesterday, the Japanese yen was able to outwit, outplay, and outlast its major counterparts as risk aversion weighed on the markets. The yen even scored a win against the U.S. dollar, allowing USD/JPY to inch closer to the 80.00 handle. Will we see more wins from the yen today?
Japan is set to release its leading indicators for April at 5:00 am GMT today. The reading landed at 100.1% in March, despite the negative impact of the earthquake on their economy. Talk about going strong! Let’s see if April’s reading can come in much stronger. Analysts are expecting it to drop to 96.8% during the month though, so keep an eye out for that.
Also due later on today are Japan’s bank lending report, current account balance, and money supply figure for May. Although these reports are slated to have minimal impact on the yen’s price action, better than expected figures could still provide support for the currency. If you’re trading yen pairs today, make sure you keep tabs on market sentiment as well!
Mixed results from yen pairs yesterday, as the yen lost out against most majors, but once again edged higher against the dollar. EUR/JPY recovered from its losses the previous day to test key resistance around 117.70, while USD/JPY dropped for the fourth consecutive day, closing 13 pips lower at 80.01.
Japan’s current account came in to show a strong figure of 550 billion yen, almost twice the expected 280 billion yen expectation. This indicates that more goods were exported in April than was expected, giving the Japanese economy a big sigh of relief.
The big story regarding the yen though is its persistent strength in the markets. The yen is slowly approaching pre-intervention levels, which has caused Japanese Finance Minister Yoshihiko Noda to say, “Yo yen bulls, chill out on the buying baby!”. Okay fine, he actually he said that’d he’d be keeping an eye on the currency markets, but clearly, he was signalling to the markets that the yen is approaching unwanted levels.
Late today at 11:50 pm GMT, the final GDP report will hit the markets. Tomorrow’s report is expected to show a small revision from -0.9% to -0.8%. In any case, I HIGHLY doubt that this will move the markets, as the yen trading has been largely affected by swings in sentiment rather than fundamental data from the mother land.
Other currencies ain’t got nothin’ on yen baby! The Asian currency won against all of its major counterparts yesterday. It extended its winning streak against the dollar to day six, with USD/JPY closing at 10 pips lower at 79.91. Meanwhile, EUR/JPY ended the day 105 pips lower at 116.42.
We had a few economic reports on tap from Japan yesterday, but I think yen bulls also have risk aversion to thank for their win.
The Ministry of Finance reported a 550 billion surplus in the country’s current account for April, which was almost double the 280 billion forecast. This was probably bullish for the yen since the report reflected a strong demand for the currency during the month.
On top of that, the Economy Watchers’ Sentiment index improved from 28.3 in April to 36.0 in May and topped the 33.3 consensus. Boo yeah!
I wonder if the yen will be able to rally in today’s trading given the not-so-impressive final GDP report for Q1 2011. Analysts had predicted the report to show that the economy only contracted by 0.8% during the quarter. However, the actual figure didn’t post any revision from its preliminary reading of -0.9%.
If you’re planning to root for the yen, don’t worry! We still have a couple of reports to sink our teeth into today. At 5:00 am GMT, the consumer confidence survey for May will be released and it is seen to have increased from 33.1 in April to 34.7 in May.
Next in line is the preliminary machine tool orders for the same month which will be due at 6:00 am GMT. A figure higher than April’s 32.3% reading will probably be bullish for the yen so watch out!