Who y’all callin’ a loser? After suffering a massive selloff for days on end, the Japanese yen got back on its feet last Friday as USD/JPY sank back to the 92.00 area. Word through the forex grapevine is that remarks from Japan’s Finance Minister sparked the yen rebound. What did he say?
As it turns out, Japanese Finance Minister Taro Aso said that the yen’s sudden depreciation wasn’t something he anticipated. After all, the yen fell to its lowest level since May 2010 against the Greenback midweek when news of BOJ Governor Masaaki Shirakawa’s early exit hit the airwaves. Although many were expecting Japanese officials to be thrilled about the yen’s recent weakness, analysts noted that Aso probably wanted to take the spotlight off the yen prior to the G20 meetings and ease speculations about a currency war.
There are no reports due from Japan today as Japanese traders are off on a holiday. Tuesday has a couple of medium-tier reports, namely consumer confidence data and the preliminary machine tool orders figures, on tap while Wednesday has the tertiary industry activity index due. On Thursday, the BOJ will make its monetary policy statement, which could cause huge moves among yen pairs. I’ll let you in on more details as the event draws near so stay tuned!
The Japanese yen suffered a bitter defeat in yesterday’s trading session as Lael Brainard, the U.S. Under Secretary of the Treasury for International Affairs, showed support for Japan’s efforts to boost growth and stoke inflation. As of this writing, USD/JPY is sitting at 94.29, its highest level since May 2010.
Brainard’s comments were very bearish for the yen as it gave traders another reason to sell it in favor of other currencies. It also implies that the U.S. will be probably be tolerant of Japan’s moves to weaken the yen.
No red flags on Japan’s forex calendar today, so there’s no reason for the yen to reverse its overall downtrend. Nevertheless, be on the look out for any surprise shifts in market sentiment. The yen is at its lowest level in almost 3 years, which means it could be heavily oversold.
What the yen giveth, the yen taketh away! After reaching the 94.40 area, USD/JPY tumbled sharply during yesterday’s trading and dipped to a low of 92.97. EUR/JPY also suffered a selloff as it edged close to the 125.00 handle while GBP/JPY ended the day 5 pips below 146.50.
It seems that G7 officials are no longer happy about the yen’s recent slide as they came up with a joint statement dismissing talks of a currency war. One G7 leader was even quoted saying that Japan will be one of the main topics in the upcoming G20 Summit, causing several traders to ease off their short yen positions.
Japan is set to release its Q4 2012 GDP today and possibly report a 0.1% rebound in economic growth. Recall that Japan’s GDP came in at -0.9% during the previous quarter so another negative reading for the next quarter could put the country back in a technical recession. Even if that’s the case, traders might be hesitant to take any short yen positions prior to the G20 Summit as many are anticipating Japanese officials to talk the yen up before the event.
Like the calm before the storm, yen pairs hardly budged from their opening prices ahead of today’s BOJ monetary policy meeting. USD/JPY finished 5 pips lower at 93.47 while EUR/JPY just chilled at its opening price of 125.71.
Japan’s quarterly GDP report just came out and it didn’t bear good news. Instead of expanding by 0.1%, the economy contracted by 0.1%, putting Japan back into technical recession. The details of the report reveal that exports had a lot to do with this decline… It fell by 14% yo!
In just a few hours, the BOJ will deliver its monetary policy statement. Though most expect no changes from the central bank, the markets are particularly edgy about today’s statement because word on the street is that the BOJ might talk up the yen in light of the G20 meetings this weekend.
People are expecting the BOJ to come under pressure when the world leaders meet in a few days. The yen’s depreciating hasn’t gone unnoticed by other countries, and many believe it will become a hot topic in the convention. In anticipation of this, the BOJ might remark on the yen’s rapid losses to slow or stall its slide in order to give it some wiggle room this weekend.
In any case, be sure to stay alert this Tokyo session because things could get crazy for the yen!
The yen bulls finally got to stretch yesterday as they pushed the currency higher against the dollar, pound, and the euro. Does this have something to do with the BOJ’s interest rate decision?
Most likely. In its monetary policy minutes yesterday, the BOJ decided to keep its rates and asset purchases steady. But what got the investors’ attention was that the central bank now believes that the economy has bottomed out and is on its way up.
Does this mean that the BOJ is ready to retire to the sidelines? This handsome old man doesn’t think so. In fact, some analysts even believe that the BOJ folks are just waiting for their new head honcho before they start popping up new stimulus measures!
But we’ll cross the bridge when we get there. For now let’s wait for the revised industrial production numbers out at 5:30 am GMT as well as the BOJ’s monthly report at 6:00 am GMT.
The yen sure is off to a weak start this week! After ending Friday 41 pips higher, USD/JPY gapped up another 24 pips over the weekend. Will the markets continue to dump the Japanese currency?
An early draft of the G20 statement kept yen buyers at bay last Friday by claiming that Japan wouldn’t be put in the hot seat in the weekend meetings. This basically gave traders the green light to sell off the yen once again.
Bearishness for the Japanese currency picked up even more on Saturday after the G20 nations declared that there will be no currency war. Japan escaped criticism for its bold moves to weaken its currency, which the markets took as a signal that Japan has been given the freedom to continue with its monetary policy easing.
In case you want to get a better feel of what the Bank of Japan plans to do next, I suggest you check out the BOJ monetary policy meeting minutes, scheduled to come out tonight at 11:50 pm GMT. Good luck and happy trading, fellas!
With some leftover sentiment from the G20 statement still lingering in the markets, yen crosses continued to edge slightly higher. EUR/JPY rose 47 pips to finish at 125.47, while GBP/JPY closed 8 pips higher at 145.31, but not before hitting an intraday high at 145.90.
Considering the tone of the G20 statement, it’s a surprise that yen crosses haven’t jumped that much higher the past couple of days. Perhaps the yen bears have run out of steam and we could be in for a larger correction. In any case, make sure you keep tabs on the developments on Japan’s major counterparts, as those will most likely serve as catalysts for big moves on the yen crosses!
Watch out later when trade balance figures hit the market at 11:50 pm GMT. Expectations are that a deficit of 590 billion JPY was hit in November, slightly less than the 800 billion JPY in October. Still, I don’t think this will cause too much of a ruckus in the markets.
The Japanese yen edged slightly higher against most of its major counterparts during yesterday’s trading as USD/JPY dipped to the 93.50 area while GBP/JPY reached 144.00. Can the yen hold on to its gains for today?
The yen was able to find some support from the minutes of the latest BOJ monetary policy meeting as it revealed that most policymakers were less dovish with their assessment of the Japanese economy. The minutes also explained why the central bankers decided to adjust their inflation target as part of their plans to combat deflation in the country.
However, weaker than expected trade balance data released earlier today shows that Japan still has a lot of work to do before attaining strong economic growth. Their trade deficit for January narrowed from 0.78 trillion JPY to 0.68 trillion JPY, which was larger than the estimated 0.59 trillion JPY shortfall.
There are no major reports due from Japan today, which suggests that yen pairs could move to the tune of country-specific events. Good luck trading!
The yen’s price action yesterday was a mixed bag. While it was able to gain versus both the euro and the pound, it lost against the safe haven dollar. The yen’s final score card was as follows: -45 pips versus the euro, -108 pips against the pound, and +18 pips versus the dollar.
The yen’s price action was driven mostly by the unexpected contents of the FOMC Meeting Minutes from the U.S. The minutes revealed that Fed policy makers would consider changes to the central bank’s open-ended QE3 program in its March meeting. Some officials noted that the central bank should be ready to “vary the pace of asset purchases” as the economic outlook changes.
On the economic front, the All Industries Activity report came in slightly better than forecast. It showed a 1.8% gain, 0.2% higher than the 1.6% rise the market had initially predicted. It was also a significant improvement from the previous reading of -0.4%.
No data on the docket today so expect the yen to be driven mostly by the market’s predictions on the next FOMC meeting. It was a game-changer, which means many traders will also adjust their positions in response.
Scoring wins against most of its counterparts, I’d say the yen had a good day yesterday. GBP/JPY was down at 141.90 from 143.04 by the end of the New York session. USD/JPY also finished lower by 71 pips at 93.12 as well as EUR/JPY closing 204 pips lower at 122.61.
There weren’t any reports released from Japan. So what got the yen flexin’ its muscles on the charts?
It would seem that the currency got some lovin’ when it was announced that Prime Minister Abe postponed his nomination for the next BOJ Governor to next week.
With our forex calendar still blank for reports for the yen today, speculations about his nomination would continue to dictate the currency’s price action. So make sure you keep an ear out, ayt?
Yen crosses didn’t move much last Friday, but boy did they come to life over the weekend! What caused these pairs to surge up the charts??
Blame it all on rumors! Over the weekend, word on the street got out that Prime Minister Shinzo Abe will nominate Haruhiko Kuroda as the next BOJ governor. Remember, Kuroda is a dude that recently went on record to say that the central bank has “substantial room” for easing, so with him behind the wheel, there’s a chance that the BOJ may take on a more aggressive stance towards stimulus. But more importantly, should Kuroda win the position, Abe will have an easier time implementing his plans to achieve his economic goals because they already see eye to eye on many issues.
But keep in mind that this is all just speculation, so the yen may trade wildly as new information (or rumors) come out this week. Be careful out there, fellas!
Guess who flexed its muscles yesterday? The yen did. Its safe haven reputation was highlighted following the initial poll results of the Italian elections. USD/JPY closed at 92.58 after opening at 94.71. Heck, it dropped even further to 90.92 early in today’s Tokyo session!
Meanwhile, EUR/JPY closed at 121.50, 379 pips below its opening price and GBP/JPY was down 230 pips at 140.67.
Don’t get too excited about buying the yen though. Some analysts say that aside from risk aversion, the yen’s rally was only exaggerated by stops getting triggered and major players taking profit from their yen-shorts.
Prime Minister Abe has still yet to announce his nomination for the next BOJ Governor. It would do you well to keep an ear out for who his pick is. If the uber-dovish Kuroda is chosen, we could see the yen get sold off once again!
Well, well, well, it looks like the yen is starting to gain some bullish momentum. For the second straight day, the low-yielding yen was able to come out on top versus both the safe haven dollar and the euro yesterday. USD/JPY ended the day 66 pips lower while EUR/JPY dropped a whopping 147 pips. The yen was considered as one of the best performing currencies.
Earlier today, the yen received another boost. Japan’s retail sales report for January showed that even though sales declined, it wasn’t as bad as analyst had initially forecasted. It only fell 1.1% and not 1.4%.
Will the yen’s winning streak continue? If you’re going to base your answer on the country’s fundamentals, then the answer is probably a resounding “No.”
For one thing, Japan’s fundamental picture hasn’t really changed. It is widely believed that Haruhiko Kuroda will be appointed as the next BOJ Governor. This is negative for the yen as Kuroda is well-known dove. Note that the incumbent BOJ Governor hasn’t altered monetary policy a single time this year, which means Kuroda is free to make any changes he wants. Also remember that the BOJ has increased the inflation rate target to 2%, and has pledged to be very aggressive in meeting this goal.
No tier 1 data ahead, but we will see the Preliminary Industrial Production report at 11:50 pm GMT. It’s expected to show a 1.6% increase, which is slightly lower than the previous month’s 2.5% rise. Rising industrial production is normally seen bullish for the domestic currency as it could mean that consumer activity is expected to increase.
So much for extending the winning streak! The yen couldn’t make it back-to-back-to-back wins, as it lost out against its major counterparts in yesterday’s trading matches.
With traders in risk-on mode, the yen was once again dumped in favor of higher yielding currencies. EUR/JPY, GBP/JPY, AUD/JPY, and CAD/JPY all climbed higher, rising over 100 pips from their daily lows. It seems that traders got risk hungry once they saw the decent U.S. economic reports that were released late in the day. Make sure you hit up my USD commentary to find out what happened!
In other news, industrial production growth figures showed an uptick of 1.0%, slightly less than the expected 1.6% number, and down from the 2.5% we saw last month.
For today, we’ve got the Tokyo core CPI report coming in at 11:30 pm GMT. The report is expected to show that deflation continues to haunt Japan, with the inflation figure anticipated to tick in at -0.6%. A lower-than-projected rate could give the BOJ more reason to implement even more aggressive easing measures, to help it reach its 2.0% inflation target.
Mixed results for the yen, which found itself stuck within a range versus the euro, but getting pounded by the pound. EUR/JPY ended the day nearly unchanged, while GBP/JPY shot up 81 pips to finish at 140.64.
The big news over the past 24 hours is that Japanese PM Abe finally announced that he was nominating ADB head honcho Kuroda to take the top spot at the Bank of Japan. Iwata and Nakaso will be taking over the Deputy Governor positions. Interestingly, this didn’t cause too much volatility on yen pairs. I suppose we should see more movement once Kuroda takes over and delivers his first speech.
For now, just be careful trading yen crosses, as you never know what type of news will send buyers and sellers into a flurry!
The yen stayed in Loserville for another day last Friday as traders continued to react to ADB head Haruhiko Kuroda’s nomination as the next BOJ boss. USD/JPY neared its intraweek highs while EUR/JPY, GBP/JPY, and AUD/JPY also inched a few pips higher.
With Tokyo and Japan’s inflation rates as well as the country’s unemployment rate staying at their previous levels, the yen bulls and bears barely paid attention to economic data. Instead, the yen lost against its counterparts on the belief that Abe’s bet for the next BOJ boss would quickly get the approval of the lower and upper houses.
Will the yen get back in the risk on/risk off game this week? The BOJ isn’t set to print its monetary policy decision until Thursday, so might see the yen trade on risk sentiment until then. Be careful in trading the yen pairs this week, folks!
Oh yeah! Despite a relatively quiet trading day, the yen still managed to hold on to its swag. Most yen pairs still closed lower. By the end of the New York session, EUR/JPY was down 16 pips at 121.86 while USD/JPY was 19 pips lower at 93.45.
In this humble old man’s own opinion, the yen was probably able to hold on to its gains as the U.S. sequester might have sparked a tinge of risk aversion among a few investors, convincing them that the yen is a safer bet than the other major currencies.
No reports are due from Japan today. However, with the BOJ rate decision scheduled on Thursday, don’t be surprised to see some movement on the currency ahead of the event. Also, be on your toes for updates regarding the U.S. sequester and the Italian elections as they could continue to affect market sentiment!
Zzzz… Thanks to lack of report and central bank speeches from Japan, the yen lollygagged in the charts yesterday. Only AUD/JPY showed some action as it rose 32 pips higher than its open price.
The Land of the Rising Sun won’t be releasing any economic report again today, so the yen will most probably trade on its counterparts’ price action. Keep close tabs on the U.S. ADP report out at 2:15 pm GMT as well as the BOC rate statement coming up at 4:00 pm GMT. Both reports could influence risk appetite, which could also affect the low-yielding yen’s price action.
Good luck and good trading, kids!
Don’t look now, but USD/JPY looks ready to break above the 94.00 barrier! The pair reached a high of 94.11 during yesterday’s trading as strong U.S. data lifted the Greenback. EUR/JPY also enjoyed some gains as the pair climbed past the 122.00 handle.
There were no major reports released from Japan during yesterday’s trading, leaving yen pairs to move mostly on market sentiment. Unfortunately for the lower-yielding currency, traders started to price in expectations for today’s BOJ interest rate decision during the Asian session.
Take note that this is Shirakawa’s last rate decision as BOJ head before the newly-appointed Governor Kuroda takes his spot. Although Shirakawa isn’t expected to announce any drastic monetary policy changes before stepping down, policymakers are expected to emphasize their commitment to easy monetary policy and warding off deflation. Stay on your toes during the actual statement as this could get really messy!
The Japanese yen received a huge beating yesterday as the prospect of further monetary easing weighed heavily on the low-yielding currency. USD/JPY is currently trading at 94.93, its highest level in almost three years.
Bank of Japan (BOJ) Governor Shirakawa held his final last meeting yesterday and decided to hold rates at 0.0% to 0.1% by unanimous vote. Even though the BOJ acted as the market had expected, many believe that Shirakawa’s exit would open the way for Kuroda’s ultra-dovish stance towards monetary policy. This resulted in a weak yen for the rest of the day.
Earlier today, the yen was treated to some good news. Japan’s trade balance managed to beat forecast and showed a surplus of 360 billion JPY. The initial estimate was a surplus of 110 billion JPY. The Final GDP figure for Q4 2012 also shared the same positive tone. It reported that Japan’s economy actually remained flat in Q4 and did not contract as the preliminary release showed.
No red flags on Japan’s economic calendar today but don’t think that we won’t see any movement from the yen. At 1:30 pm GMT, the U.S. Non-Farm Payroll will be released. If it comes in better than expected, USD/JPY could skyrocket again.