It seems like yen bulls had too much sake during yesterday’s trading as the currency’s scorecard printed mixed outcomes. EUR/JPY ended the day 39 pips lower at 109.60 but USD/JPY closed the day 23 pips above its opening price at 76.80.
What gives, yen?!
I have a feeling that Europe’s sovereign woes allowed the yen to post a win against the euro. However, with the Bank of Japan putting 76.00 as the floor to USD/JPY, there was very little room for the Asian currency to move against the dollar.
But depending on the outcome of the NFP report later, we may see the yen stage a comeback and kick the dollar’s butt on the charts. So make sure you don’t miss it later at 12:30 pm GMT! If you’re unsure how to trade the report, check out Forex Gump’s article about the possible scenarios for the release.
What weak economic data? Risk aversion in king! USD/JPY’s fall to its 76.55 intraday low and EUR/JPY’s 55-pip slide to 109.05 gave proof that traders are buying up the low-yielding yen despite the downside surprises in Japan’s economic reports.
If the yen continues to dominate its counterparts this week, then you bet your neighbor’s cat that we’ll hear something interesting from the BOJ this week when its members release their monetary policy decision on Wednesday, tentatively at 12:00 am GMT.
And that’s just only the beginning. On Wednesday at 5:00 am GMT we’ll also get hold of Japan’s leading indicators, followed by the country’s core machinery orders data, bank lending, and trade figures at 11:00 pm GMT. If the reports print out way weaker than markets expected, then we might see the yen pare back some of its gains.
As exciting as those reports are though, the fireworks won’t start until Wednesday. In the meantime, why don’t you watch risk sentiment? Judging by the poor U.S. NFP figures last week, I’m pretty sure markets will struggle to get hold of risk appetite. Stand by and watch for any strong moves in the low-yielding yen!
Thanks to risk aversion, the Japanese yen was able to outpace most of its major counterparts yesterday, except for the U.S. dollar. USD/JPY opened at 76.86, dipped to a low of 76.68, then pulled up for a positive finish at 76.89. Can the yen continue to bank on its safe-haven appeal today?
Japan’s economic schedule is empty for today, which leaves the yen vulnerable to risk sentiment. However, it seems that traders are still favoring the other safe-havens since there’s always the possibility of a BOJ intervention.
With the BOJ monetary policy decision and press conference scheduled for tomorrow, yen traders would probably be hesitant to take any large positions on the yen pairs today. If that’s the case, yen pairs could be in for a lot of consolidation today!
Up and down the yen went, where it ended up… I know! Yesterday, the yen had gone all over the place versus other major currencies but eventually ended the U.S. trading session just where it started. EUR/JPY, for instance, went as high as 125.00 from its opening price at 123.91, but closed the day at 123.89.
There were two major market movers yesterday. First, there was the news that the Swiss National Bank would make 1.2000 the minimum rate of EUR/CHF. Second, the ISM non-manufacturing PMI from the U.S. came out much better than expected, calming some of the market’s double dip recession fears.
Today, it’s Japan’s turn to release important data as the Bank of Japan will announce its decision on interest rates. The market widely expects the bank to keep rates below 0.10%, so pay attention instead to the accompanying statement for any currency intervention talks.
You can’t win 'em all, can you? The Japanese yen may have outpaced the Greenback and the British pound yesterday but it lagged behind its higher-yielding counterparts. USD/JPY landed 40 pips down from its 77.68 open price, but EUR/JPY jumped from a low of 108.28 to close right at the 109.00 mark. Is the yen in for another round of losses today?
Improved risk appetite, thanks to the German court ruling on the bailouts, forced traders to leave the safe-haven yen in exchange for the high-yielders. Although many traders were on edge prior to the BOJ rate statement, most were relieved that the central bank didn’t stage any drastic currency intervention moves. Phew!
The BOJ decided to keep rates at their current levels for now, while many speculated that the central bank is considering further easing. Bear in mind that Japan is also dealing with the rapid appreciation of the yen, which has a negative impact on its export industry. In fact, the Japanese Ministry of Finance already mentioned that they are closely monitoring the yen’s behavior, suggesting that they are ready to intervene if necessary.
Economic data from Japan came in weaker than expected, with their core machinery orders and current account balance missing the forecasts. Core machinery orders posted a dismal 8.2% decline for July while their current account surplus tumbled from 0.92 trillion JPY to 0.75 trillion JPY in the same month. By the looks of it, Japan could really benefit from more stimulus!
Today, Japan is set to release the BOJ monthly report at 5:00 am GMT. This report contains the data used by the BOJ policymakers in making their latest monetary policy decision. It could also reveal their outlook for the Japanese economy and their future policy adjustments, so make sure you do your homework and read up!
Also due today is Japan’s final GDP reading for the second quarter of the year. The preliminary version showed a 0.3% economic contraction for the period, but this figure could be revised downwards to show a 0.5% decline.
Mixed results for the safe-haven yen! While risk aversion gave it a lift against most of its counterparts, it weakened against the dollar, the pound, and the Kiwi! Will we get more of the same today?
You can’t really blame the yen for having mixed results yesterday since Japan got mixed feedback on the economy, too! While final Q2 2011 GDP growth came in as expected at -0.5%, the BOJ monthly report seemed slightly optimistic.
According to the BOJ’s outlook, we should expect the economy to “return to a moderate recovery path.” The central bank also noted that production and exports have been on the rise, and that many of the problems dealt by the earthquake have already been dealt with. The boys of the BOJ even added that private consumption and business investment have been picking up as well. Perhaps Japan won’t need more quantitative easing after all, eh?
No heavy reports due for release today. So for now, keep an eye on risk sentiment! Now that the SNB has stepped in definitively to stop the CHF’s rise, the yen has become an even more appealing choice in times of risk aversion. Expect it to rally once more if risk sentiment turns sour. Good luck, kids!
The low-yielding yen is on a roll! Despite the release of poor consumer confidence data, risk aversion flows kept the yen well supported last Friday. USD/JPY capped the day near its open price, but EUR/JPY plunged by 175 pips to 105.87.
Japan’s consumer confidence data printed a 37.0 index figure for August, which is the same as the index reading in July, but is weaker than the expected 41.3 reading. Still, traders weren’t exactly trading the yen on Japan’s fundamentals last Friday.
Bearish news reports from the euro zone made the low-yielding yen attractive to traders, especially when the SNB practically put a cap on the franc’s gains. But will the yen continue to dominate its high-yielding counterparts today?
Last weekend we saw Yoshio Hachiro, Japan’s trade minister, resign from his post after making a verbal blunder about the Fukushima evacuation. Though the offended citizens of Fukushima probably appreciated the gesture, it signals more headaches for the newly appointed Prime Minister of Japan.
Getting back to economic data though, we also saw Japan’s BSI manufacturing index rise to a 10.3 reading for the third quarter, which is a lot better than the -23.3 reading in the second quarter. Meanwhile, tertiary activity in the country slipped by 0.1% in July after growing by 1.8% in June.
No other major news report will be released from Japan save for the industrial production report on Wednesday at 4:30 am GMT so keep your eyes peeled for any news that might affect risk appetite!
You win some, you lose some! Yesterday, the yen got a taste of both victory and defeat as it romped the dollar and weakened against the euro. While USD/JPY closed 8 pips lower at 77.30 after falling to an intraday low of 76.75, EUR/JPY finished 36 pips higher at 105.61. Will the yen pull another Jekyll and Hyde today?
As I had mentioned yesterday, the yen was met with a bit of mixed news to start the day. Japan’s BSI manufacturing index rose to 10.3, surpassing the -23.3 reading in the second quarter. If you recall, the second quarter of 2011 was when economic wounds from the earthquake were at their freshest. That being said, it wasn’t surprising that this report showed a great improvement in business conditions for manufacturers quarter on quarter.
On the other hand, tertiary activity in the country slipped by 0.1% in July after increasing by 1.8% in June, signaling that Japan isn’t out of the woods just yet.
Don’t hold your breath for any reports today because you ain’t gonna get 'em, son! For now, I advise you to keep track of risk sentiment as it’s been the driving force behind the markets as of late. Remember, risk aversion is the yen’s friend!
Make that two for two for the yen this week! Once again, the yen edged higher versus the dollar, as it marked a 25-pip gain to finish tat 76.94. Is it only a matter of time till we see USD/JPY test major support at 76.50 once again?
No biggies coming out from Japan today, but it is the middle of the week and with U.S. retail sales and U.K. employment data lined up, we could be in for some volatility during the London and New York trading sessions. Stay on your toes and be flexible my young padawan traders!
A strong case of risk aversion propped the Japanese yen up against most of its counterparts, including the U.S. dollar. USD/JPY ended 24 pips below its 76.88 open price while GBP/JPY closed 6 pips below the 121.00 handle. However, the yen surprisingly lost ground to the euro, with EUR/JPY closing 14 pips up from its 105.28 open. Can the yen continue to benefit from risk aversion today?
Although Japan’s industrial production figure was revised down from 0.6% to 0.4% for the month of July, the yen was still able to score some decent gains yesterday. This was because the downgrade of two French banks and weak economic data from the U.S. triggered a wave of risk aversion, forcing traders to flock to the safe-haven yen.
No economic reports are due from Japan today but there are plenty of top tier data on the U.S. economic schedule which could affect risk sentiment. Better check out my U.S. commentary to figure out whether the reports could miss expectations and bring more safe-haven flows to the Japanese yen!
The yen got sliced up like a sushi roll in yesterday’s trading action, as risk appetite helped boost higher yielding currencies. EUR/JPY ran up the charts to close at 106.39, marking a near 100-pip gain. Meanwhile, AUD/JPY gained 39 pips to finish at 79.07.
The yen’s losses yesterday should help alleviate intervention concerns, as the yen was close to trading at all-time highs against some of its counterparts. However, we’re gonna have to see a lot more days like yesterday before threats of intervention begin to die down. With USD/JPY still trading below the 77.00 handle, just be sure to stay on your toes and be ready for any action, verbal or otherwise, from the Bank of Japan over the next couple of weeks.
Without any economic report on tap, the yen’s fate on the charts last Friday was pretty much dictated by market sentiment. USD/JPY opened at what would be its intraday low at 76.64 and ended the day 20 pips higher at 76.84. On the other hand, it was able to bag pips out of the euro when EUR/JPY closed 40 pips below its opening price at 106.01.
Perhaps concerns about Europe’s sovereign crisis allowed the yen to end the week with a win against the euro. Meanwhile, I have a feeling that talks of intervention from the BOJ kept USD/JPY well above 76.00.
Our forex calendar is still blank for reports from Japan today so make sure you get a feel of market sentiment, ayt?
Now THAT’S gangsta! The yen put a hurting on all of its major counterparts as the markets had very little appetite for risk yesterday. EUR/JPY took a 76-pip fall to 104.76 just as GBP/JPY tumbled 111 pips to 120.15. Will it rule the charts again today?
Things were pretty chill in Japan yesterday as Japanese bankers were out on holiday. They yen seemed to be on vacation as well as it simply sat back and allowed the tides of risk aversion to carry it up the charts.
Today, Japan will get back into action by launching its most recent trade balance report at 11:50 pm GMT. Its trade deficit is expected to narrow from 13 billion JPY to 1 billion JPY. A trade surplus would definitely be a welcomed sight as it would imply stronger-than-expected exports, so be on the lookout for any upside surprises. And of course, keep risk sentiment in check! Risk aversion has been fueling yen demand as of late, and it may continue to do so today.
No data? No problem! The yen managed to make pip-sushi out of most of its major counterparts during yesterday’s trading despite the lack of economic reports from Japan. USD/JPY ended the day 8 pips below its opening price at 76.45 and EUR/JPY closed 32 pips lower at 104.42.
I’m not sure if the yen would still fare well in today’s trading after the worse-than-expected trade balance report for July though. Analysts predicted that imports had outpaced exports by only 100 billion JPY. However, data showed a larger trade deficit of 290 billion JPY.
But it ain’t over yet! Later today, at 4:30 am GMT, we’ll also get dibs on the All Industries Activity index for August. Watch out for a figure better than the anticipated 0.9% uptick as this would probably be bullish for the yen.
Thank you Operation Twist! Even though the yen gave up some ground versus the dollar yesterday, the currency was able to post significant gains against other major currencies. The yen managed to close 114 pips higher versus the pound and steal 18 pips from the euro.
Even though expected, the Fed’s plan to implement Operation Twist led market participants to believe that the U.S. economy was in poor condition, which resulted in a wide-reaching case of risk aversion.
No data scheduled to be released from Japan today and none again tomorrow. Because of this, we could possibly see volatility die down in the next two days.
Give it up for the king of the charts! True to its Chuck Norris-like performance early this week, the yen once again flew off the charts yesterday as investors flocked to the low-yielding currencies. USD/JPY lost 38 pips, EUR/JPY plunged by 143 pips, and Guppy plummeted by 180 pips. Boo yeah!
The economic boards were empty in the “Land of the Rising Yen” yesterday, so the yen’s price action can be attributed to risk aversion in markets. Weak economic data from the major economies, as well as a disappointing FOMC statement led investors to believe that major central bankers are treading water to avoid recession and further weakness in global economic growth.
With the yen flirting with record highs, how do you think the BOJ will react? Analysts are expecting Finance Minister Jun Azumi and his BOJ friends to jawbone a bit more in an attempt to weaken the yen, but with fears of deteriorating global economic growth looming over the markets, it might take a lil’ bit more than a few speeches to discourage investors!
Japan is having a bank holiday today, but make sure you keep your eyes glued to the tube for any updates that might affect risk sentiment.
The dollar’s strength proved to be too much for the yen last Friday as USD/JPY soared as high as 76.89. It appears that the pair found strength due to news reports saying that policymakers in Japan were going to firm in combating deflation by devaluing the yen and stimulating the domestic economy.
This week, key data won’t start coming out until Wednesday. At 11:50 pm GMT, the Japanese retail sales report will be published. The market expects a -0.6% figure, opposite the 0.6% increase seen the month before.
Then, on Friday, Japan’s inflation data will be released. The National Core CPI is slated to remain at 0.1% while the Tokyo Core CPI is anticipated to improve to -0.1% from -0.2%. The preliminary industrial production report will also be released. The report is expected to show a 1.5% increase, a huge jump from last month’s 0.4% gain (revised down from 0.6%)
The upcoming data probably won’t be as market-moving as you want though. Historically, the reports tended to have a minor impact on price action, so I wouldn’t expect [I]too much[/I] volatility out of them!
Based on the way the yen pared back its gains against its major counterparts, we can say that risk was on like Donkey Kong yesterday. USD/JPY only slipped by 3 pips to 76.47, while EUR/JPY climbed from an intraday low of 101.94 and finished the day with only an 8-pip loss.
The BOJ might have gotten a reprieve yesterday, but it certainly doesn’t mean that the central bank is putting down its guard! Despite the lack of warnings from the BOJ lately, many market geeks still believe that another currency intervention is still in the cards.
On the economic front, Japan just released the change in the price of services bought by corporations. The data showed a 0.4% decline in August, which is in line with expectations but is lower than the -0.3% reading in July.
No other report is scheduled for release in the Land of the Rising Sun today, so keep your eyes out for any major news report that might rock risk appetite!
Once again, risk appetite proved to be the yen’s ultimate kryptonite. The Asian currency lost against most of its major counterparts as market sentiment improved yesterday. USD/JPY ended the day 31 pips higher at 76.78, EUR/JPY was up 106 pips at 104.38, and GBP/JPY closed at 120.01 after opening at 118.97.
It seems like investors are getting their hopes up that European policymakers will come up with a a plan to contain the debt crisis. Consequently, rumors coming out of Europe gave market participants the confidence to buy higher-yielding currencies.
With that said and given that we don’t have any major economic report on tap from Japan today, make sure you get a feel of market sentiment before taking any trade. Who knows, we may just see the yen rally at the slightest bit of bad news from the euro zone.
“Alright, who turned off risk aversion yesterday?!” The BOJ peeps are probably back on the edge of their seats after the yen strengthened against its counterparts yesterday. USD/JPY ended up falling by 21 pips to 76.57 while EUR/JPY also stepped down to 103.73.
The yen didn’t likely move on Japan’s economic data because the only report scheduled was released a only couple of hours ago. Japan’s retail sales dipped by 2.6% in August after clocking in a 0.6% decrease in July. So what pushed the yen higher?
If you answered risk aversion, then you’re right! Sentiment on the euro zone crisis took a step back yesterday and pushed the investors to the low-yielding currencies like the yen.
Let’s see if the yen can go for two today with many economic reports coming out from Japan. BOJ Governor Shirakawa will set the stage with his speech today at 6:15 am GMT, and will be followed up by Japan’s manufacturing PMI, household spending, Tokyo CPI, and unemployment rate, and preliminary industrial production reports between 11:00 pm GMT to 11:50 pm GMT.
Make sure you’re around to trade these potential market movers!