Move over safe-havens, the high-yielding currencies are back in the black! Though Japan clocked in better-than-expected economic reports yesterday, the yen was left in the dust as traders rode a wave of risk appetite. USD/JPY inched up by 29 pips, while EUR/JPY also rocketed by 75 pips to 116.56.
After the better-than-expected core machinery orders and leading indicators data were released in Japan yesterday, traders turned their focus to reports from other regions.
Of course, as we have seen, the London and the U.S. session was full of good vibes and risk appetite as the ECB raised its interest rates and the U.S. printed a surprisingly strong ADP report. Markets decided to load up on the high-yielding currencies, which pushed the low-yielding yen down the charts.
Will the yen bulls get back their mojos today? Early today Japan’s current account surplus showed a tighter figure at 390 billion JPY, down 51.7% from its May figure last year and represents the third consecutive monthly drop as the natural disasters in March take its toll on the economy. Uh-oh.
Don’t worry, there’s still the big NFP report from the U.S. today at 12:30 pm to spice things up for the yen bulls and bears. If the data surprises to the downside, then we just might see traders go back to the arms of the low-yielding yen.
Stay sharp on your trades, kids!
Talk about a big finish! Thanks to disappointing U.S. reports, the yen was able to close the day on a very positive note. Upon the release of the report, USD/JPY dropped 100 pips to end the day strongly at 80.62.
As I mentioned in my U.S. roundup, the non-farm payrolls (NFP) greatly disappointed, causing traders to ditch the dollar in favor of other major currencies. The NFP only showed an 18,000 gain instead of the 97,000 increase initially expected.
This week, the important event to watch out for is the Bank of Japan’s interest rate decision tomorrow. The market widely expects the central bank to keep rates below 0.10%, so traders will probably focus on the accompanying statement instead. If the bank says some optimistic things about the economy and the outlook, we could see the yen continue to rally versus the dollar.
Safe haven currencies rock! Despite the release of mixed economic reports in Japan, the yen clobbered its chart partners yesterday on a big wave of risk aversion in markets. USD/JPY ended up 31 pips down from yesterday’s open price, while EUR/JPY also crashed by 229 pips to 112.54. Boo yeah!
Yesterday Japan released its household confidence numbers, which slightly weakened to a 35.3 index reading in June from its 34.2 figure in May. Meanwhile, the preliminary machine tools orders report was also released, which printed strongly at a 53.3% growth in June from its 34.0% rise in May. Lastly the tertiary index activity, or the value of services purchased by businesses, fell to only a 0.9% growth in May from a 2.5% increase in April.
Of course, you can’t keep track of Japan’s fundamentals alone. Yesterday the yen traded heavily in markets as traders ditched the high-yielding assets in favor of the low-yielding ones like the yen. Since word on the street is that the Bank of Japan is in no hurry to click the magic “intervention” button, we might see the yen soar higher if the honchos in the U.S. and the euro zone don’t do anything to pacify the markets anytime soon.
Speaking of the BOJ, it is scheduled to release its monetary policy statement tomorrow at around 12:00 am GMT, with a press conference right after the decision. Though the BOJ isn’t expected to dramatically change its stance from last month’s decision, we should still closely watch the statements for clues on additional stimulus or even a currency intervention.
Just like hottie Megan Fox, the yen didn’t need a lot of positive reports to woo the bulls. Well, kinda. It gained another 157 pips from the euro when EUR/JPY closed at 110.94 and another 86 pips from the dollar when USD/JPY ended the day at 79.40.
With growing concerns about a European debt contagion, it isn’t hard to imagine investors flocking to the yen. After all, the currency is regarded by many as a ‘safe haven’ asset.
Yesterday the BOJ announced that it will keep interest rates unchanged at 0 to 0.1% and left the asset purchase facility steady at 10 trillion JPY. More importantly, we heard BOJ Governor Masaaki Shirakawa express the bank’s optimism on recent developments on the economy.
The Tertiary Industry Activity index for May also beat the expected 0.8% uptick when it came in at 0.9%
It seems like hotshots at the central bank don’t see the trend in growth being sustained for too long though. The BOJ cut its growth forecast, saying that growth by March 2012 would probably be at 0.4% after initially estimating it at 0.6%.
We have the revised industrial production report from Japan today, but I think that market sentiment would play a greater role in the yen’s fate on the charts.
At 4:30 am GMT, analysts are expecting to see no changes in the final version of the report on production with the forecast at 5.7%.
After days of gaining against other major currencies, the yen finally decided to take a break and give up a little bit of ground. At the end of the U.S. trading session, EUR/JPY was sitting at 111.72, a respectable 76 pips higher from its open price. Meanwhile, GBP/JPY rose to 127.21 from 126.37.
It seems like the market’s aversion to risk has gone away… for now. We really have to ask ourselves whether the fundamentals have changed. The European debt crisis is still present, and this could simply be a strong rebound due to profit taking. Safe havens, such as the ever-so-shiny gold, set a new record high yesterday.
The only important economic data due today from Japan is the Bank of Japan’s (BOJ) monetary policy meeting minutes at 11:50 pm GMT. The minutes do not have an impact on the yen’s price action, so don’t hold your breath for that.
What you should keep an eye out for though are the economic reports from the U.S. (PPI, retail sales, and initial jobless claims) as they usually have a strong effect on the yen’s price action.
Is anybody else smelling a BOJ currency intervention coming? The yen traders certainly did! Thanks to yesterday’s dollar strength though, the possibility was put off by another day. USD/JPY climbed to an intraday high of 79.60 before settling down to 79.15, while EUR/JPY capped the day with a 15-pip gain at 111.84.
Though no economic figure was released from Japan yesterday, the BOJ’s monetary policy meeting minutes revealed the polcymakers’ concerns regarding the uber strong yen. Since Japan’s exports make up a huge part of its GDP, it makes sense for the BOJ to contemplate an intervention as a strong currency hurts export competitiveness.
The economic board is empty in the Land of the Rising Sun today, but make sure you keep close tabs on risk sentiment, aight? If the yen strengthens significantly in the next days, then we just might see more BOJ peeps hint at an intervention!
Is the yen getting too strong for the BOJ’s comfort? It seemed like traders were wary to buy the Japanese yen last Friday as talks of a possible currency intervention started to surface. Still, the yen was able to hold its ground against the euro and even scored some gains against the pound and the U.S. dollar.
The minutes of the latest BOJ monetary policy meeting made no mention of any central bank concerns on the yen’s recent rallies. The policymakers did point out that they were still worried about the aftermath of the March earthquake and tsunami, which was why they decided to keep interest rates at their current levels. They also pointed out that production and demand are starting to pick up in the Japanese economy.
This week, only a couple of reports are due from Japan and these are the trade balance and the all industries activity index. The trade balance, which is due Wednesday 11:50 pm GMT, could show that their deficit narrowed from 0.47 trillion JPY to 0.25 trillion JPY. Meanwhile, the all industries activity index due Thursday 4:30 am GMT could print a 1.9% uptick for May.
Consolidation, consolidation, consolidation! The dullest currency pair turned out to be none other than USD/JPY. The pair barely moved and simply traded within an extremely tight 25-pip range all day as Japanese banks were out on holiday.
With Japanese traders piling back into their trading stations today, we could finally see USD/JPY exhibit some much-needed movement.
I know there aren’t any important events on Japan’s economic calendar, but do keep an eye out for a possible breakout! Normally, pairs tend to breakout strongly after a long period of consolidation. In USD/JPY’s case, watch for potential breaks of the previous day high or low.
The Japanese yen weakened against most of its counterparts as risk appetite popped its head back in the markets. USD/JPY ended the day at 79.22 while GBP/JPY closed 80 pips up from its 126.95 open price. Does this mean that the BOJ won’t need to intervene anymore?
BOJ Deputy Governor Yamaguchi also seems to be watching the yen’s movement closely along with Finance Minister Noda. He even noted that the central bank is ready to ease monetary policy if the strengthening yen proves to be very damaging for Japan’s export industry. He pointed out that the Japanese economy is already having a tough time as it is since it is trying to recover from the damage of the March 11 earthquake, and a rising yen is making this recovery even more difficult.
To find out whether the yen’s appreciation is starting to hurt Japan’s exports, stay tuned for the release of the trade balance report at 11:50 pm GMT today. It could show that the deficit narrowed from 0.47 trillion JPY to 0.25 trillion JPY in June. Stay on your toes for a yen selloff if the actual figure comes in weaker than expected and shows an even larger shortfall.
Hey hey hey! Don’t count the yen out just yet! After taking a hit on Tuesday, the Japanese currency was able to bounce back and post gains across the board. Against the dollar, it rose 54 pips, forcing USD/JPY to test its one-week old support level.
Surprisingly enough, the yen was actually one of yesterday’s biggest gainers, even as higher-yielding currencies marched up the charts. Indeed, the yen’s strength has been intense as of late, which is why the BOJ has stepped up to say that it’s watching the yen’s moves closely. Sounds like jawboning to me!
Will the yen continue rising today? So far, it seems like it’s just picking up where it left off last night. With Japan’s trade balance data (-0.19 trillion JPY vs. -0.25 trillion JPY) giving a pretty decent showing just a few hours ago, yen bulls have been tearing it up. Apparently, exports, which is Japan’s cash cow industry, declined less than expected last month.
That’s about it from Japan today. In the meantime, be sure to monitor developments in the U.S. and euro zone as they could dictate risk sentiment and price action on the yen today.
Mixed results for the yen yesterday, as it took advantage of broad USD weakness, but lost against all other majors as risk sentiment took a turn for the better yesterday. USD/JPY managed to close 32 pips to close at 78.44, while EUR/JPY rose a solid 75 pips to finish at 112.80.
As long as concerns about the European debt crisis subside, risk appetite should pick up. And when it does, yen crosses could rise. Don’t take this as bad news though, as that’s exactly what Japanese officials want. Remember, Japan wants the yen to weaken in order to help stimulate exports.
On the other side of the coin though, USD/JPY is slowly approaching unwanted levels. With all the problems Uncle Sam is dealing with, the pair may continue to crawl down the charts. Don’t be surprised if we start hearing catcalls for coordinated intervention in the near future.
Even the yen wasn’t spared from the snoozefest last Friday! Yen pairs were practically dead as USD/JPY ended the day unchanged and EUR/JPY dropped just 7 pips.
No data from Japan last Friday. Initially, markets had thought that the U.S.'s debt ceiling talks would cause a bit of craziness on the charts, but it just wasn’t meant to be last Friday as U.S. policymakers couldn’t come to an agreement.
However, that doesn’t mean it won’t have an impact on the yen in the days to come. As a matter of fact, you could say that developments in the U.S. will determine whether or not the yen will stay at its current 4-month high. If the U.S. fails to resolve its debt ceiling issues, it could result in risk aversion which in turn would probably boost the yen and reignite intervention talks.
On the other hand, if the U.S. is able to finally settle its debt ceiling matters, it could restore confidence back into the markets and push the yen back down.
In any case, it might also be worthwhile to catch BOJ Governor Shirakawa’s speech at 2:30 am GMT. If he expresses any concern about the yen’s strength, we may see a mini yen selloff.
The rest of the week looks light as we only have retail sales data due on Wednesday and CPI due on Thursday. So in the meantime, be sure to keep yourself posted on developments in the U.S. and Europe! Good luck!
With no big catalyst to rock the market, yen pairs pretty much went into Zen mode. GBP/JPY, EUR/JPY, and USD/JPY all pretty much consolidated and closed near their openings prices. Will we see a breakout soon?
No biggies from the market yesterday, although we did hear Bank of Japan Governor Masaaki Shirakawa speak about the state of the Japanese economy. In his speech, Shirakawa said that Japan was on a solid pace of recovery, and that the economy would return to pre-disaster levels by the third quarter. Not bad! Sake bombs on the dojo!
Nothing on deck today, but be aware of shifts in risk sentiment. Even with the threat of intervention, the yen remains strong in times of turmoil, as investors unwind their positions in riskier assets and are forced to cover their short yen positions.
The Japanese yen chalked up losses against most of its major counterparts, except for the U.S. dollar. EUR/JPY ended 56 pips up from its 112.53 open price while AUD/JPY landed 40 pips above the 85.00 psychological handle. USD/JPY, on the other hand, fell to a new low at 77.83.
Japan didn’t release any economic data yesterday but the yen had some pretty volatile moves during the Asian session thanks to an explosion in the northeast part of China. Apparently, there was a blast in an apartment building in Dalian, which caused some panic in the Asian markets. However, this wasn’t enough to keep the yen from rallying against the U.S. dollar, which was suffering from the lack of progress in U.S. debt talks.
Japan is set to release its retail sales report at 11:50 pm GMT today and this report could show that consumer spending dipped by an annualized 0.6% in June after falling by 1.5% year-over-year in May.
Also, stay on your toes for any possible intervention moves, verbal or otherwise, by the BOJ and Japanese government. Last I heard, BOJ Governor Shirakawa warned about the damaging effect of the rising yen on Japan’s exports and that the central bank is carefully monitoring the yen’s movements.
With risk aversion taking over the markets, the yen reigned supreme in yesterday’s pip wrestling matches. USD/JPY continued to trickle down the charts, hitting a new low at 77.56 before closing at 78.00. Meanwhile, EUR/JPY dropped nearly 100 pips before finishing at 112.11.
Japan got a bit of good news late yesterday, as a report showed that year-on-year retail sales growth was at 1.1%, the complete opposite of the expected 0.6% decline. It looks like Japanese consumers are getting back to their spending ways, which helps put the economy back on track.
The major problem for Japan right now though, is the persistent strength of the yen. Currently, the yen is as smoking hot as former Transformer chick Megan Fox! The rise of the yen has got everyone at the Bank of Japan and Ministry of Finance squirming, as a strong yen hurts Japanese exports. Don’t be surprised if rumors of intervention hit the headlines over the next couple of weeks.
Later today at 11:30 pm GMT, we’ve got a slew of second tier events coming in. Household spending, Tokyo CPI, and preliminary industrial production figures are all on deck, and should give us a better indication of how the Japanese economy is performing right now.
Thanks to risk aversion, the Japanese yen was able to chalk up gains against its major counterparts yesterday. USD/JPY opened at the 78.00 handle but ended at 77.77 while EUR/JPY slid from its 112.10 open to close at 111.26.
Japan’s economic data came in mixed yesterday. Their manufacturing PMI climbed from 50.7 to 52.1 in July, suggesting that manufacturing conditions are starting to pick up in their economy. Core CPI climbed by 0.4% in Tokyo and in the rest of Japan, while household spending slipped by 4.2%. Industrial production also fell short of expectations as it printed a 3.9% increase, less than the predicted 4.6% rise.
Despite all that, traders showed a lot of love for the Japanese yen, which emerged as the better safe-haven currency than the U.S. dollar. Lack of progress in the U.S. debt talks caused traders to shy away from the Greenback. Aside from that, Japanese Economics Minister Kaoru Yosano’s announcement that the central bank is unlikely to intervene with the yen’s strength also boosted demand for the currency.
Today, only the housing starts report is due from Japan. The report is expected to show that housing starts rose by an annualized 4.9% in June, slightly less than the 6.4% uptick seen last May. Stay tuned for this report due 5:00 am GMT.
Save for the Swiss franc, the yen dominated all its major counterparts as risk aversion set in and pushed yen crosses down. USD/JPY dropped 78 pips and closed below 77.00 for the first time since the earthquake. When will the BOJ act to stop the yen’s rise??
Even poor economic data doesn’t seem to faze the yen anymore. All of last Friday’s reports were well in the red! Household spending dipped 4.2% year-on-year in June, almost double the decline that was expected. Also, Japan’s core CPI rose just 0.4%, rather than the forecasted 0.5%. Last but not least, industrial production climbed just 3.9% instead of 4.6% as analysts had predicted.
But with so much uncertainty in the markets these days, traders are looking past Japan’s weak fundamentals and continue to flock towards the safe haven yen. Japanese officials are becoming more and more vocal about the yen’s strength, as USD/JPY is now at highly uncomfortable levels, well below 80.00. Expect more jawboning and talks of intervention to hit the newswires in the coming days if the yen doesn’t show signs of slowing down.
The only thing to watch out for this week is the BOJ monetary policy statement on Friday. Chances are, we won’t see any changes made to monetary policy. But maybe the central bank will shed some light on what they plan to do about the yen’s strength.
Good luck trading this week, kids! Remember, risk aversion is the yen’s friend!
The yen was ballin’ up the charts like Kobe in yesterday’s trading. It scored its new all-time high against the dollar at 76.29 before ending the day at 77.10. It also gained 109 pips against the euro as EUR/JPY closed at 109.97.
Risk aversion sparked by talks of slowing economic growth in the U.S. allowed the yen to rally despite the lack of reports from the Land of the Rising Sun. However, yen bulls seemed to have gotten spooked by the disappointing earnings report released earlier.
Yen pairs spiked up a bit during the Tokyo session following the average cash earnings report. The data showed that incomes of Japanese workers declined by 0.8% in June and disappointed the market’s forecast which was for 0.4% uptick.
But I don’t think the bad figure would have a lasting effect on the currency’s performance on the charts today. Just keep tabs on market sentiment and if risk aversion continues, the yen may keep on rallying. But remember to also be on your toes for talks of a BOJ intervention, ayt?
Pop question: Besides the dollar and the Swissy, which other major currency benefits greatly from risk aversion? The yen of course! Thanks to the slight case of risk aversion in the market, the yen was able to steal some pips from its Western counterparts yesterday. USD/JPY ended the day with a small 4-pip loss while EUR/JPY posted a 44-pip decline.
Data from Japan didn’t agree with the yen’s moves though! The average cash earnings report showed a huge 0.8% decline, opposite the 0.4% gain initially expected.
No reports coming out from Japan today, so the yen’s price action will probably be primarily driven by U.S. data. Keep an eye out on the ADP’s version of the NFP and the ISM non-manufacturing PMI!
Ooohhh baby, is that intervention I see? After consolidating for the past few days, USD/JPY broke out higher earlier today and is back above the 78.00 handle as I write! Could the BOJ have a hand in this?
Earlier this week, some Japanese officials had expressed concerned about the strength of the yen. After all, it was trading at pre-intervention levels and was continuing to make new highs against the euro, pound, and dollar.
This morning, USD/JPY spiked up over 100 pips over a span of a few minutes, and is currently trading near the 78.50 handle. Normally, interventions don’t work unless there’s a coordinated effort, and even if there is one, there’s no guarantee that the currency will stay weak.
With the [URL="http://www.babypips.com/school/the-whos-who-of-the-central-bank.ht.