Daily Economic Commentary: Japan

Who ya callin’ a loser now? The Japanese yen bounced back on its feet in yesterday’s trading sessions and recovered most of its previous losses against its major counterparts. EUR/JPY edged back below the 130.00 handle while crashed to the 154.00 area.

Japanese banks were on a holiday yesterday, which meant that there were no reports released from Japan and that the yen was sensitive to risk sentiment. Fortunately for the lower-yielding currency, risk was off in yesterday’s trading sessions as several major economies had to deal with a fresh batch of economic problems.

There are no major reports due from Japan again today, which suggests that yen pairs could continue to trade on market sentiment. Stay on your toes!

Just when you thought that the yen would continue to sink to new lows, the yen bulls pulled out their ninja stars and sliced their way to victory yesterday posting decent gains against the euro, pound, and dollar. Could this be the beginning of a huge retracement on yen pairs?

For the first time since 2008, the Japanese stock index broke the 14,000 barrier, indicating that investors are finding Japanese equities to be quite attractive. Keep in mind that if an investor wants to buy up Japanese stocks, he must first purchase some yen to fund his investment. This is probably the reason why the yen was so resilient yesterday.

That said, my advice for those of you trading the yen this week is to pay attention to that Nikkei! If it keeps climbing up the charts, the yen might just follow suit!

The yen’s scorecard was as messy as a sloppy Joe in yesterday’s trading. While it managed to finish the day with a 5-pip win against the dollar, it gave up 71 pips to the euro and 46 pips to the pound. What gives??

Well, the lack of economic reports from Japan once again made the yen vulnerable to market sentiment. But don’t fret! Today, the leading indicators report for March will be released and it could give the currency a clearer direction on the charts. Due at 5:00 am GMT, the report is eyed to come in at 97.7 and hint that the outlook for the Japanese economy is getting better.

Watch out for it, ayt? A positive figure may just give the yen a boost in today’s trading!

No mixed results this time around… The markets voted unanimously against the yen, making it yesterday’s weakest performer. For the first time since April 2009, USD/JPY broke above 100.00, closing 171 pips higher. Likewise, EUR/JPY forged a new high of its own as it closed 101 pips higher at 131.18.

The technical break of 100.00 on USD/JPY, which was caused by the U.S.'s strong jobs report, seems to have had a spillover effect on yen crosses. It gave higher-yielding currencies an easy day on the charts against the safe haven yen.

But how will it fare today? So far, it ain’t doing too well as the markets don’t seem to be showing any signs of slowing down yet. Then again, the current account report, which was published just a few hours ago, didn’t really give traders any reason to buy up the yen. It printed a surplus of .34 trillion JPY versus forecasts that called for a surplus of .48 trillion JPY.

Looking ahead, Japan doesn’t have any more tier 1 reports on tap, so in the meantime, check out what the U.S. has to offer if you plan on trading USD/JPY. Good luck and happy trading!

What a performance! USD/JPY finally broke through the 100.00 major psychological level last Friday, achieving its highest level since October 2008. With this new development, market participants are saying that the pair could go to 104.00 or even 105.00 in the near future.

According to the Ministry of Finance, Japanese investors have become net buyers of foreign bonds after 6 weeks of intense selling. This has resulted in a lot of capital flowing out of Japan, suggesting the weak yen trend could continue.

In other news, the country’s current account balance, which was expected to show a 480 billion JPY surplus, only showed a 340 billion JPY surplus. Meanwhile, the Economy Watchers Sentiment survey failed to meet forecast. It printed a reading of 56.5, significantly lower than the 59.2 reading the market had initially predicted.

This week, the only red flag on Japan’s economic calendar is its GDP report. It’s set to publish on Thursday and it’s anticipated to show that the country grew 0.7% in the first quarter. If forecast holds, it will be a welcome improvement from Q4 2012’s -0.1% reading.

The yen bears were chillin’ ice cream filling yesterday as they watched the yen pause from its Monday selloff. After reaching new intraweek lows, some yen traders thought it prudent to take profits. This is probably why USD/JPY and EUR/JPY capped the day near their open prices.

Japan didn’t release any major economic report yesterday, but the G7’s approval over Abenomics and continued yen weakness dragged the yen’s counterparts to fresh lows. Fortunately for the yen bulls, traders were inclined to take profits during the later trading sessions, which inspired dojis on the yen pairs’ daily charts.

Japan will have its 30-year bond auction today at 3:45 am GMT, followed by the preliminary machine tools orders at 6:00 am GMT and the tertiary industry activity at 11:50 pm GMT. These reports usually have minimal effect on the yen, so make sure that you also watch out for reports from other major economies that might affect the yen’s price action!

Yo, yen! Where did your swag go?? The currency chocked up losses against its major counterparts yesterday. USD/JPY flew past the 102.00 major psychological handle and closed at 102.28 while EUR/JPY finished the day with an 18-pip gain.

The effects of the G-7’s supposed approval of the BOJ’s aggressive easing measures seems to have lingered in the markets. I wonder, will it carry on today?

Market sentiment will most probably determine that. So make sure you gauge the market’s mood before trading the yen. Remember that it tends to do well when risk aversion is in play!

Finally, a break! The yen managed to prevent the dollar from advancing any further yesterday, forming a doji type candlestick on the daily chart. USD/JPY opened the day at 102.28 and then closed the day barely changed at 102.32.

Earlier today, we received some good news from Japan. Japan’s preliminary GDP report for Q1 2013 showed that the economy expanded 0.9%, much higher than the 0.7% growth initially expected. The figure for Q4 2012 was also revised up to 0.0% from -0.1%. The better-than-expected results helped the yen gain slightly.

On today’s economic cupboard, we’ve only got Japan’s Core Machinery Orders report. It is projected to show a 3.1% increase, which is more than one half the gain seen the month before. A rising reading is normally seen as positive for the domestic currency as it signals that manufacturers will increase their activity.

The yen still hasn’t caught a break! It continued to give up ground to its counterparts. USD/JPY was up 9 pips from its opening price at 102.34, GBP/JPY was up 46 pips at 156.25, while EUR/JPY was unchanged for the day at 131.78.

Then again, it’s noteworthy to mention that the yen has somehow minimized its losses. For the most part, it’s probably because of the improvements we’ve seen in the recent Japanese reports.

Yesterday, Japan’s preliminary GDP reading for Q1 2013 came in higher at 0.9% versus the 0.7% forecast. The revised industrial production reading also came in better than the expected reading of 0.2% at 0.9%.

Will the yen continue its performance? After all, the core machinery orders report came in earlier at 14.2% versus the 3.1% consensus.

What do you think?

Traders showed no love for the yen on Friday, allowing several yen pairs to make new highs. USD/JPY finally broke above the 103.00 major psychological resistance while EUR/JPY jumped above 132.00. Will the yen selloff continue this week?

There were no reports released from Japan on Friday, as stronger than expected U.S. consumer sentiment data was responsible for pushing USD/JPY past the 103.00 mark. There are no reports due from Japan today, which means that yen traders could gear up for the BOJ monetary policy statement on Wednesday.

Other reports due from Japan this week are the all industries activity index, trade balance, and BOJ monthly report. BOJ Governor Kuroda is scheduled to give a couple of speeches during the latter half of the week, as he could shed more light on the central bank’s monetary policy plans. Don’t miss out on these events if you’re trading the yen pairs this week!

Akira Amari saves the day! Thanks to a speech by Japan’s Economy Minister, the yen was able to put a stopper on its losses. USD/JPY dropped by 80 pips while EUR/JPY finished the day well below its intraday highs.

Amari rocked the newswires in yesterday’s Asian session trading when he hinted that the yen’s rally is near its completion. Not only that, but he also added that any further losses would have negative consequences for Japanese consumers.

No matter how potentially game-changing Amari’s comments are though, traders will most likely wait for the BOJ’s monetary policy statement or even BOJ Governor Kuroda’s speech to see if the central bank shares Amari’s sentiments on the yen’s gains.

While we wait for the BOJ’s conference tomorrow, you could trade Japan’s all industries activity due at 4:30 am GMT, followed by the country’s trade balance numbers at 11:50 pm GMT.

Another day of consolidation for JPY pairs, as they all pretty much stuck within their recents ranges. It seems that everyone is just waiting for USD/JPY, EUR/JPY, and GBP/JPY to break for new highs. Hmmm… I wonder what could serve as a catalyst for a breakout…

Look out homies, the Bank of Japan will be delivering its next monetary policy decision today!

Last month, the BOJ announced a total revamp of their program, basically doubling their monthly asset purchases. Now, no changes are expected from today’s statement, but you never know what might be said, so watch out! Any comments that the BOJ ain’t quite done yet may trigger another round of yen selling, allowing yen crosses to shoot higher!

The yen was still unable to escape the bear lair in yesterday’s trading. It gave up 43 pips to the dollar as USD/JPY finished higher at 102.93. It made a good hustle during the New York session against the euro though. EUR/JPY spiked up to 133.81 only to drop to 132.32. However, the yen was still 4 pips short of finishing the day with a win.

Despite speculations that the BOJ might tone down its dovishness, the BOJ refused to budge! The BOJ head honcho only reiterated the bank’s rhetoric, saying that it would keep its aggressive easing policy in place. Japanese policymakers acknowledged the recent pick up in growth but it seems like it’s still not enough reason for them to take it easy in pumping stimulus to the economy.

For the most part of the latter sessions, the yen’s price action was then dictated by Ben Bernanke’s speech and the FOMC meeting minutes. With that said and given that no market-moving events are due from Japan today, make sure that you keep tabs on the top-tier events that we have scheduled from the euro’s counterparts today as they would probably affect the yen’s price action.

Boy, when the yen strikes back, it hits hard! It posted monstrous gains alongside the drop in the Nikkei, taking USD/JPY down 112 pips to 101.81 and EUR/JPY 61 pips lower to 131.72.

Risk aversion crippled the markets after China published a contraction in its manufacturing industry. After they saw a rise in Japanese bond yields and a massive decline in Japanese stocks, the markets went loco for the yen as their love for the safe haven currency was rekindled.

The question on everyone’s mind is – is this the end of the yen sell-off? Well, on one hand, we can say that the move yesterday was grounded on fundamentals. But on the other hand, we cannot overlook the divergent views that the Fed and the BOJ have in terms of monetary policy.

The Fed is already considering an exit strategy while the BOJ recently reaffirmed its commitment to keep easing – such a gap in monetary policy stances may continue to keep USD/JPY supported. In fact, this may be the reason why the yen has already erased much of its gains from yesterday. This also suggests that any rally we see in the Japanese currency may be short-lived.

In just a few moments, BOJ Governor Kuroda will deliver a speech at the at the “Asia’s Search for Steps Towards Stronger Ties and Integration” conference. The central bank head might just give us further insight on the BOJ’s future plans (and a possible reaction to yesterday’s move), so don’t forget to tune in at 2:55 am GMT!

Check out the Nikkei putting the “Yeah!” in yen! Another topsy-turvy day in the Japanese equities market was enough to rock the yen last Friday, as the Japanese currency was able to score another day in gains. USD/JPY sank below the 101.00 barrier while EUR/JPY dipped close to 130.00. Can the yen keep it up?

The sharp drop in the Nikkei last Friday triggered another wave of yen rallies, as equity traders sold stocks in exchange for the yen. In addition, BOJ Governor Kuroda’s speeches pushed the yen around, as he spoke of the improvements in Japan but cautioned that it’s too early to be very bullish on the economy.

The BOJ just released the minutes of their latest monetary policy meeting, which should shed light on why the central bank decided to keep their easing program unchanged and how long they plan to keep implementing it. The red flags on Japan’s schedule for the week are the retail sales release on Tuesday and inflation reports on Friday. Stay on your toes and watch out for more Nikkei moves when trading the yen!

Score another one for the yen! Most of London and U.S. session traders celebrated bank holidays yesterday, so it was easy for yen traders to track the Nikkei’s performance.

Another down day boosted the yen against its counterparts, enough to drag pairs like EUR/JPY, USD/JPY, GBP/JPY, and AUD/JPY below their open prices.

A couple of hours ago Japan’s corporate services price index came in at -0.4%, which is even weaker than the previous month’s -0.2% decrease. Good thing that it didn’t rain on the yen’s parade though, as traders were still focused on the local equities markets and the return of volatility from yesterday’s holidays.

The next report we’ll see from the Land of the Rising Sun is the retail sales report, which is expected tomorrow at 11:50 pm GMT. Weak data supports Economy Minister Amari’s prediction that the weak yen is affecting Japanese consumers, so make sure that you keep close tabs on this one!

Not this time! The yen couldn’t hold off its counterparts’ advances, as a rebound in the Nikkei pushed the safe haven currency lower. USD/JPY surged 121 pips to 102.28 while EUR/JPY climbed 84 pips higher to finish at 131.56.

In other news, Japanese retail sales data just came in… and get this – results were better than expected! Sure, the 0.1% decline is nothing to go nuts about, but after considering the 0.4% decrease that many had anticipated, it sure is a relief to see a much smaller drop.

No more reports coming out today, but because the yen has been reacting strongly to the Nikkei, y’all should make it a point to track Japanese stocks. Good luck and happy pippin’!

What a day for the yen! The yen sliced and diced its way throughout the forex markets, as risk aversion took its toll on the markets. After trading above 102.00, USD/JPY now finds itself trading below 101.00. Is a test of 100.00 coming up next?

With traders scaling back their positions on riskier assets, traders had to scale back their short JPY positions, which are used to help fund their positions. This massive drop in USD/JPY helped the yen rally against other major currencies as well.

Watch out late tonight as we’ve got a couple of second tier data scheduled for release at 11:30 pm GMT. Household spending is projected to have clocked in at 3.1% year-on-year, which would be a nice follow up to the 5.2% uptick we saw the month before. Meanwhile, a CPI report is projected to show that deflation still persists, with the Tokyo core CPI report projected to print a figure of -0.2%.

Later on at 11:50 pm GMT, the preliminary industrial production index will be released, and word on the street is that we’ll see an uptick of 0.8% for last month.

To be honest though, I don’t think these reports will have a direct impact on the forex markets, but it’s always good to know the state of any economy, as it will definitely influence monetary policy decisions down the road.

The yen’s price action was as mixed as my laundry as appetite for higher-yielding currencies got mixed in with demand for the yen. USD/JPY bowed to the yen’s strength but EUR/JPY and GBP/JPY inched a bit higher at the end of the day.

Weakness in the Asian markets as well as speculations that the BOJ would impose new forex trading margin rules to limit volatility boosted the yen early in the day. However, upside surprises in reports from the euro region soon tempered the yen’s gains.

Let’s see how the latest Japanese data dump would affect the yen. A few hours earlier we saw Japan’s manufacturing PMI inch higher from 51.1 to 51.5, its household spending drop from 5.2% to 1.5%, and its preliminary industrial production reading come in at 1.7% against last month’s 0.2% reading. Meanwhile, the country’s CPI declined by 0.4%, only a bit better than the 0.5% decrease that we saw last month.

I’m sure other analysts will have their two cents about these reports, but for now it looks like the BOJ is only making slight progress in its inflation goals, and, judging from the significant decrease in household spending, we can say that the weak yen is starting to affect consumer spending.

Keep an eye on the yen pairs for the rest of the day, aight? After all, we might see some delayed reaction from the London and U.S. session traders!

For the third straight day, the Japanese yen was able to hold its own versus the U.S. dollar last Friday. The USD/JPY pair fell to 100.47 after it had opened at 100.77.

The yen seemed to have climbed due to news reports saying that the BOJ monetary stimulus has taken the yen too low, and would have adverse effects to the global economy. It said that the yen’s exchange rate has fallen so low, and that G7 economies could start considering intervening to reverse the trend.

The only piece of data released last Friday was the Housing Start figures. It showed a rise of 5.8%, significantly higher than the 4.8% increase the market had initially expected. This helped support the yen.

No major data on the docket this week for Japan, but there are a lot of high profile reports scheduled to be released from other major economies. Be careful trading this week, as volatility will most likely be abundant!