Daily Economic Commentary: Japan

There’s just no stopping the yen bears! Once again, the yen found itself with the short end of the stick, as it was sold-off in favor of higher yielding currencies. USD/JPY rose above 99.00, hitting its highest level since 2009, while EUR/JPY is now trading a shade below the 130.00 mark.

The only question now is, how much further can this go? Buying momentum on yen crosses is strong, so we can probably expect this run up to continue. Just be sure to pay attention to any reports from other countries, as those may cause extra volatility on yen crosses.

Is the yen selling starting to slow down? With EUR/JPY and USD/JPY approaching key levels, yen weakness wasn’t as evident in the markets yesterday. The question is, how long can this continue?

USD/JPY is currently trading below 100.00 and this major psychological level could prove to be a major resistance point. Keep in mind though, that there could be tons of buy stops above 100.00, and brokers see this. They might go hunting to trigger those orders and go on a stop hunt after.

All I’m saying is, be careful trading the yen pairs for now homies!

After a day or two of consolidation, the Japanese yen resumed its losing streak against its major counterparts as USD/JPY reached a high of 99.72 before closing at 99.68. Do you think it’ll reach the 100.00 mark today?

Only a few minor reports were released from Japan lately and these are the core machinery orders and the bank lending data. Annual bank lending is up by 1.6%, higher than the previous 1.5% reading, while core machinery orders came in stronger than expected and showed 7.5% growth. However, these improvements barely had an impact on yen price action as the Japanese currency continued to sell off on the BOJ’s easing efforts.

There are no reports due from Japan for the rest of today’s Asian session, but do keep an eye out for the tertiary industry activity index release in tomorrow’s early Asian session as this could result in some quick retracements on yen pairs.

Is this the end of the line for the yen bears? After all, USD/JPY just formed a really slick looking doji on the daily chart and closed just below the 100.00 psychological level!

Earlier today, the monthly tertiary industry activity report indicated that service industries grew by 1.1%, which is a nice turnaround from the 1.5% decline we saw last month. This was also better than the projected 0.8% increase. Nevertheless, this doesn’t seem to have given the yen much support.

In a couple of hours, Bank of Japan Governor Kuroda will be speaking at the Yomiuri International Economic Society. There’s no telling what he’ll talk about, but chances are he’ll be asked about how the BOJ revamped its bond purchase program, so we could see some volatility at the end of the Tokyo session.

And the losing streak ends! For the first time in seven days, the yen finally finished with a win against EUR/JPY. The pair closed 160 pips below its opening price at 129.25. It also scored a win against the dollar as USD/JPY closed at 98.64 after starting the day at 99.85. Boo yeah!

It helped the yen a lot that its counterparts were weighed down by currency-specific bad news. For instance, the dollar was dragged down by the disappointing U.S. retail sales report while the euro got hit by news that the bailout for Cyprus would be capped at 10 billion EUR.

However, it also helped that the BOJ’s bond buying disappointed market expectations. Some analysts say that yields on Japanese bonds were higher than they were before the BOJ’s uber dovish rate statement and led some investors to doubt the bank’s commitment to aggressively loosening its monetary policy.

BOJ Governor Haruhiko Kuroda is scheduled to speak today at 6:15 am GMT today and he would probably provide more insight on the matter. Make sure you keep an ear out for what he has to say!

Yowza! Thanks to risk aversion, the yen became the top dawg among the major currencies in yesterday’s trading. It finished the day with gains against all of its counterparts, snagging 146 pips from the dollar, 262 pips from the euro, and 278 pips from the pound. Boo yeah!

Worse-than-expected data from China had some investors panicking and dumping higher-yielding currencies in favor of the yen’s “safe haven” appeal.

Will risk aversion carry on in today’s trading?

Maybe, but that will most likely depend on the roster of reports we have on tap. There are quite a few high-caliber events on tap from the euro zone and the U.K. If I were you, I’d keep a close eye on them. Worse-than-expected figures may just fuel risk aversion even further and help the yen extend its gains!

Curse you, risk appetite! The yen gave up almost all of its gains from Monday in yesterday’s trading as its higher-yielding counterparts rallied. USD/JPY finished the day higher at 97.60 after opening at 96.79. Meanwhile, EUR/JPY closed higher at 128.65 from its opening price of 126.13.

I have a feeling that market sentiment would continue to dictate the yen’s price action today given that there aren’t any market-moving data due to be released from Japan. Also, expectations of what the G-20 may say about Japan’s new monetary policy measures may influence the Yen ahead of the event.

With that said, keep in mind that the currency usually rallies on the heels on risk aversion but doesn’t do so well when risk appetite is up.

If mixed is your thing, then you probably enjoyed how the yen moved yesterday. While it lost slightly against the dollar, the currency was able to post some gains versus both the euro and the pound. USD/JPY, for instance, rose to 97.21 from 97.60. EUR/JPY, in contrast, fell to 127.91 from 128.65.

Japan’s consumer confidence survey failed to meet expectations yesterday. It came in with a reading of 44.8, much lower than the 46.7 the market had initially anticipated. It was above the previous month’s 44.3 reading though.

Earlier today, Japan’s trade balance came in line with forecast and showed a 920 billion JPY deficit. It was a slight improvement from last month’s 1.09 trillion JPY deficit.

No data on the docket today, so the yen’s direction will likely be determined by events taking place in other major economies. Pay special attention to U.S. data, as they could have an indirect but strong effect on the yen’s price action.

It was a day of consolidation for yen pairs, as we didn’t see much movement in the markets. With the weekend fast approaching, could that all change today?

No economic data lined up once again today, but do watch out for that G20 meeting. G20 leaders have talked about currency devaluation in the past, and it will be interesting to see if they have anything to say about the Bank of Japan’s aggressive monetary policy.

Awww, poor yen! It looks like traders are back to their old tricks again, selling the yen like there’s not tomorrow. The currency lost against most all major currencies, falling 174 pips versus the euro and declining 129 pips against the dollar.

Apparently, the yen declined due to comments from Japan’s finance minister, Taro Aso. In the G20 statement, he was caught talking down the yen, saying that the currency still isn’t weak enough. Other finance officials didn’t seem to think that anything was wrong with what he said, and resulted in a huge sell-off in the yen.

No major report was published last Friday, and this week, there’s only one red flag on Japan’s economic cupboard. On Friday, the Bank of Japan (BOJ) interest rate decision will be released. The market widely expects the BOJ to keep rates unchanged and maintain its current asset purchase program.

Finally, a breather! The yen recovered some of its losses against its counterparts yesterday after posting heavy losses following the G20 weekend meeting. USD/JPY, EUR/JPY, and even GBP/JPY ended the day a couple of pips below their open prices.

Japan didn’t print out any economic report yesterday, which made the yen vulnerable to profit-taking near the major psychological levels (a.k.a. USD/JPY’s 100.00 and EUR/JPY’s 131.00 handles). Are the yen bears done with their cause or are they simply taking a breather?

We’ll have to look at the other major economies’ reports for confirmation. The BOJ won’t be making waves in the currency markets until Friday, so any upside breakouts on the yen crosses will most likely be triggered by events outside the Land of the Rising Sun.

Good luck trading today, fellas!

Without any catalyst from Japan, the yen’s scorecard was as mixed as a bag of M&M’s in yesterday’s trading. Even with a spurt of volatility thanks to the false Associated Press tweet about explosions at the White House, it only gave up 11 pips to the dollar, it finished the day with a 36-pip gain against the euro when EUR/JPY closed at 129.29.

Still, no reports are scheduled from the Land of the Rising Sun today. If you’re planning to trade the yen, it might do you well to keep tabs on reports that we have on tap from its counterparts. It looks like there are a couple of top-tier data on the docket from the U.S. and the euro zone today.

Usually, the yen does really well when risk aversion is in play. And so, disappointing figures may just boost the currency in today’s trading. Make sure you don’t miss them, ayt??

Japan didn’t print any economic data yesterday, so the yen bears were given free passes on the yen crosses. USD/JPY, EUR/JPY, and GBP/JPY all inched higher than their open prices despite the release of weak reports from the U.S., the U.K., and the euro zone. What gives?

From the looks of it, traders are positioning themselves ahead of the big BOJ monetary policy decision up in a few hours. Since the G20 meeting all but gave the green light on the currency wars, the BOJ might get back to talking down its currency.

But don’t get excited just yet! At 11:1 pm GMT Japan will print its manufacturing PMI, followed closely by the Tokyo and Japan’s inflation figures. The BOJ is closely watching its inflation data so you better watch out for it too!

Brace yourselves, people! The BOJ is set to make its interest rate decision today and we all know what happened last time! USD/JPY is currently trading close to the 99.00 major psychological level, as traders wait for the central bank’s announcement. Which way will it go?

In their previous rate statement, the BOJ set off a massive yen selloff when they unveiled their ultra aggressive monetary policy easing program. This time around, analysts are saying that the Japanese central bank could simply provide an assessment of their ongoing easing efforts and will probably make no changes to its current monetary policy.

Note, however, that the latest CPI figures still posted declines, with the Tokyo core CPI falling by 0.3% and the national core CPI chalking up a 0.4% drop. With that, the BOJ could reiterate how serious it is about battling deflation in the country and possibly hint that they are ready to expand their QE if necessary. If that’s the case, yen pairs could resume their previous rallies.

Keep your eyes and ears peeled for the release of the BOJ’s economic projections as well since these could provide clues on how long the central bank will keep implementing their quantitative easing measures.

The Japanese yen ended the week with a big smile on its face as it rose substantially versus other major currencies. Against the U.S. dollar, for instance, the yen gained a whopping 128 pips (that’s huge in USD/JPY’s standards). Versus the euro, the yen rallied 135 pips.

The yen mainly appreciated because the Bank of Japan (BOJ) decided to stand pat on monetary policy. At the BOJ meeting, Japanese policymakers decided to maintain interest rates at virtually zero and keep the asset purchase program at the annual pace of 60-70 trillion yen.

In the accompanying statement, the central bank upgraded the economic outlook, saying that the economy is predicted to pick up pace at the middle of the year.

The BOJ also revised up its growth and inflation forecast. GDP is estimated to expand 2.9% in the current fiscal year, significantly higher than the previous forecast of 2.3%. Meanwhile, the core inflation rate is projected to increase 0.7% versus prior consensus of 0.4%. In essence, the BOJ did not make any changes to monetary policy but considerably upgraded the economic outlook.

No key reports on Japan’s forex calendar this week, but there are some tier 2 data on deck. Tonight, we’ll see reports on household spending, the labor market, industrial production, and consumer activity. Then tomorrow, at 1:30 am GMT, the Average Cash Earnings report will be published. Lastly, on Thursday, the Monetary Base report will print.

The lack of liquidity wasn’t enough to stop the yen from getting any action in yesterday’s trading, as USD/JPY jumped from a low of 97.35 to a high of 98.20. With Japanese markets set to reopen today, will we see bigger moves from yen pairs?

Japanese traders were on a bank holiday yesterday in celebration of the Golden Week and they’re expected to come back to work today. The reopening of the Japanese markets, combined with today’s set of economic data from Japan, could result to more sustained moves among the yen pairs.

Earlier today, Japan reported an improvement in its manufacturing PMI for April as the index rose from 50.4 to 51.1. Household spending also showed a strong increase for March as the reading jumped by 5.8%, higher than the estimated 1.8% increase and the previous month’s 0.8% uptick. On top of that, Japan’s unemployment rate dipped from 4.3% to 4.1% in March, better than the projected 4.2% reading.

Industrial production, on the other hand, fell short of expectations as the report showed a mere 0.2% increase instead of the estimated 0.4% growth. Retail sales also disappointed as it printed a 0.3% decline instead of the expected 0.5% increase.

Later on, Japan is set to print its housing starts report and possibly show a 5.7% reading, which would be higher than the previous 3.0% figure. Other than that, no other reports are due from Japan, which suggests that yen pairs might move to the tune of risk sentiment or currency-specific events. Stay on your toes!

We got mixed results from the yen, but considering the mixed reports that we got about the Japanese economy, it wasn’t all to surprising! While the yen snatched 38 pips away from the dollar, it lost 18 pips to the euro. Which way will it go today?

As I had mentioned yesterday, the early release of Japanese reports provided inconsistent feedback about the economy. On one hand, manufacturing activity, the unemployment rate, household spending, and housing starts saw nice improvements and signaled a much-needed recovery in Japan. But on the other hand, industrial production and retail sales both came as big disappointments. Yikes!

Let’s see if today’s reports have anything good to say about the economy. At 1:30 am GMT, Japan will be publishing its average cash earnings report, which is slated to show a 1.0% decline. Then at 11:50 pm GMT, the BOJ’s latest monetary policy meeting minutes will be available. This could provide us with some valuable insight as to what’s on policymakers’ minds, so it would be wise of you to check this release out, homies!

Eenie meenie miney mo, which direction will the yen go? Yesterday the yen’s price action was as mixed as a protein shake. It gained against the Greenback and the comdolls but finished the day almost unchanged against the euro and the pound. What’s up with that?

Most of the Asian session traders celebrated Labor Day so the yen didn’t see much action until the U.S. session when it benefited from overall dollar and comdoll weakness.

Japan isn’t scheduled to release any economic report today so you might want to pay attention to reports from other major economies that might affect risk appetite. I hear that the BOE and ECB are set to fire up the newswires today!

You win some, you lose some! While the yen managed to strengthen against the euro and take EUR/JPY 31 pips lower, it weakened against the dollar as USD/JPY rose 65 pips. Where’s it headed today?

Well, that might depend on what happens in the London and New York sessions, because our homies in Japan will be celebrating a bank holiday (Constitution Day) today. That means price action during the Tokyo session may be a bit limited.

In any case, we’ve got some heavy reports lined up tonight that could serve as catalysts for some big moves just before the weekend. Check out my USD commentary if you’re looking to trade the news!

What a terrible day to be a yen bull! The Aussie, euro, pound, and dollar all rocked the yen last Friday, as the cross pairs all sky-rocketed up the charts. Will we see more of the same to start the week?

A run of risk appetite doomed the yen, as traders decided to use the yen to fund their investments in higher-yielding currencies. With USD/JPY now approaching the key 100.00 mark, the question that’s bugging me right now is what will serve as a catalyst for the yen sell-off to continue?

Looking ahead, there’s nothing big lined up on our economic calendar, so you’ll have to take your cues from data from other countries, or any comments made by BOJ officials.