Daily Economic Commentary: Japan

Give another round of applause for the yen! The Asian currency gained for another day yesterday after weak Nikkei performance and U.S. manufacturing data boosted its demand. USD/JPY ended up 109 pips lower than its open price while EUR/JPY also slipped by 65 pips.

Yesterday Japan released its capital spending and monetary base reports, both of which came in better-than-expected. But perhaps what influenced the yen’s price action more was the dollar weakness that came with a weak US manufacturing report. The data encouraged a lot of traders to take profit from their long USD/JPY trades, which pushed the yen higher across the board.

Japan’s average cash earnings report was released a few hours ago, but from the looks of it traders are barely paying attention to its disappointing figures. Maybe waiting for major reports like the RBA statement or the U.S. trade balance reports out later today would present more trade opportunities. Oh, and don’t forget to watch Nikkei’s performance, too!

The Japanese yen lost ground to most of its major counterparts during the Asian session before consolidating for the rest of the day. USD/JPY bounced up to a high of 100.41 while EUR/JPY jumped back to the 131.00 area.

Japan reported weaker than expected average cash earnings for April, as the figure showed a mere 0.3% uptick on a year-over-year basis. This was lower than the estimated 0.6% increase in average income but better than the previous month’s 0.9% decline. This goes to show that ‘Abenomics’ is already starting to have some kind of effect on income, and it remains to be seen if this could translate to more spending and stronger growth.

There are no reports on Japan’s schedule for today, which suggests that yen trading could be sensitive to market sentiment and data from other economies. Stay on your toes!

The yen’s rally ain’t over, folks! After taking a break on Tuesday, the Japanese currency resumed its climb, rising up against its major counterparts. With the markets cheering it on, it pushed USD/JPY down 90 pips to 99.13 and EUR/JPY 108 pips lower to 129.77.

It looks like investors aren’t done dumping Japanese stocks yet! With the Nikkei still experiencing heavy selling pressure, traders decided to park their money in the safe haven yen. Some say that it’s only a matter of time before the BOJ steps in to stabilize the local stock market and prevent further gains for the yen.

In fact, word on the street has it that they might push for make more frequent bond purchases and that the announcement to do so could come as early as next week! With that said, y’all should keep your eyes peeled and ears open for announcements from Japanese officials!

Ladies and gentlemen of the forex arena, let’s give the yen a round of applause for its spectacular performance yesterday! The currency absolutely demolished the other major currencies, rallying a massive 210 pips versus the dollar, 124 pips against the euro, and a whopping 126 pips versus the pound.

The yen sold-off mostly due to Prime Minister Shinzo Abe’s speech. Abe, in his speech, outlined the government’s plan for supporting the economy. He mentioned that the battle against deflation could be won through monetary stimulus measures and economic growth. However, the speech was not well received market participants thought it was too general and lacked any specifics. This stock market fell in response, and caused traders to seek the safety of the yen.

There is important data release on the docket from Japan today but that doesn’t mean that the yen will be dead. In fact, with the U.S. non-farm payrolls coming out at 12:30 pm GMT later, there is a big chance that the yen will experience a lot of volatility later.

Uh-oh! It looks like the yen has lost its zen. After posting spectacular rallies against its counterparts during the earlier parts of the week, the Asian currency finally gave up ground on Friday. USD/JPY finished higher at 97.04 from 96.62 while EUR/JPY was up at 128.79 from 128.53 by the end of the New York session.

If you ask me, the lack of reports from Japan might have left the yen vulnerable to market sentiment. Unfortunately for the yen bulls, risk appetite picked up following the better-than-expected jobs figure from the U.S.

But don’t worry! If you’re looking to trade the yen today, it might please you to know that earlier, the country’s final GDP reading for Q1 2013 was revised higher to 1.0% from 0.9%. To top it off, the current account for April was higher at 850 billion JPY versus the 390 billion forecast.

I’m just not so sure if these figures will be enough to boost the yen all throughout today’s trading though. What do you think?

Ooomph! The yen received another punch in the gut yesterday as it lost against most of its major counterparts. It ended the day 97 pips lower against the dollar, 187 pips down against the euro, and a ridiculous 211 pips lower against the pound. Yikes!

Japan’s upside surprises in its GDP and other tier 2 reports might have encouraged yen sellers to buy Japanese equities. In fact, that’s probably why Nikkei popped up by 4.49% yesterday! If you remember, Nikkei’s strength can sometimes translate to a weak yen as investors take out their long JPY positions to fund their Japanese equities purchases.

The continuation of the yen’s weakness will most likely depend on the BOJ’s policies announced today. In a couple of hours the BOJ is set to release its monetary policy statement, where it is widely expected to introduce or at least tweak its existing programs that might weaken the yen. As we saw last week, the yen could gain pretty strongly if the BOJ disappoints.

If you’re into news trading though, you can always wait for the core machinery orders report out at 11:50 pm GMT. The data is expected to slide a bit from its positive figure last month, but keep an eye out for any surprises!

No more Mr. Nice Guy! The yen might have let its counterparts get the best of it early in the week, but it wasn’t fooling around yesterday. It struck back hard, taking USD/JPY 285 pips lower while dragging EUR/JPY down 321 pips.

Blame it all on the BOJ! With Kuroda announcing no additional easing measures, the markets received the green light to buy up the yen once again. Kuroda had thought that the extra bond purchases that he announced back in April would be enough to please the markets, but apparently, that wasn’t the case. The markets want to see action!

They were probably surprised by the BOJ’s decision to do nothing, because many were expecting some sort of intervention from the central bank to calm and stabilize movements in the Nikkei, yen, and bond market. Is the BOJ pushing its luck?

According to Kuroda, the BOJ doesn’t see a current need for further easing at the moment. But you have to wonder how long they’ll let the markets run wildly before taking action.

No Japanese events on tap for today. In the meantime, keep an eye on the Nikkei, since it has been driving yen price action as of late.

Where are you headed, yen? Yesterday, the safe haven currency printed mixed results against its counterparts. While it was able to score a win against the dollar as USD/JPY closed 11 pips lower at 95.90, it gave up ground to the euro as EUR/JPY closed at 128.02 from 127.69.

USD/JPY failed to close below 95.00 and disappointing data might have caused the yen a strong rally. The core machinery orders report for April came in much lower than expected at -8.8% versus the -8.3% consensus.

Later today, at 11:30 pm GMT, the BOJ will release the minutes of its last meeting. If it shows that the BOJ isn’t looking to loosen monetary conditions even further, we could see USD/JPY finally break below 95.00. So make sure you’re on your toes for it, ayt?

On a roll, baby! The yen absolutely KILLED it in yesterday’s trading session, as USD/JPY finally broke 95.00, opening the floodgates for all the yen bulls. When will the carnage stop!?

With the Nikkei and the rest of the Asian equity markets dropping like a Danny Green three pointer, the yen benefitted from a tidal wave of risk aversion yesterday. The problem is that investors lack confidence in the Japanese government, who don’t quite know what to do about rising yields and a crashing market. If officials don’t act soon, we may see this recent fall in the Nikkei and the rise in the yen continue.

For now, keep your eyes glued to the Japanese stock market, as this will most likely give you the biggest clues as to where the yen is headed!

The Japanese yen extended its rally last week as market participants were disappointed by the Bank of Japan (BOJ)'s absence of extra actions. The Japanese stock market also reacted with a huge drop, closing at its lowest level this year at 12,686.50. Risk aversion was the major market theme, enabling the yen to rack up major gains versus other currencies.

Earlier today, the Tertiary Industry Activity report was released. It was worse than expected, printing a flat reading versus the 0.2% increase initially forecasted. However, the previous month’s reading was revised up to -0.2% from -1.3%, which was more than enough to balance out the disappointing result.

This week will be a light one in terms of data as the only red flag on Japan’s economic calendar is the speech by BOJ Governor Kuroda. It’ll take place on Friday, at 6:25 am GMT. As the head of the central bank, traders will be keen to hear what he will say. This is especially true now when the BOJ is pumping so much money into the economy to fight deflation and to support the economy.

The yen started the week on the wrong side of the charts as speculators took advantage of overall risk appetite. Both USD/JPY and EUR/JPY posted gains after clocking in two consecutive losing days last week.

With the yen recently clocking in its highest weekly gain against the Greenback in four years, it’s easy for investors to believe that the BOJ won’t receive any criticism for its efforts in actively weakening the yen in this week’s G8 meetings. And with BOJ’s Kuroda set to have a speech this week, the yen bears as well as Japanese equities investors are optimistic that the BOJ would do something about the yen’s recent gains.

At 4:30 am GMT today we’ll see Japan’s revised industrial production numbers, followed by the Land of the Rising Sun’s trade balance figures at 11:50 pm GMT. Of course, don’t forget to tune in on sentiment on the Greenback as it could affect USD/JPY, one of the most closely watched pairs this season.

Finally, yen sellers came out to play! They put up their best performance in a week as USD/JPY posted its second rise in a row, climbing from its opening price 94.46 to end the day with an 85-pip gain at 95.31. Is this a sign of things to come?

The day began with a bit of bad news from Japan – industrial production only grew 0.9% in April amid forecasts that called for a repeat of the 1.7% surge the previous months. To put things into perspective, year on year, this translates to a 3.4% decline!

Japan’s Economy Minister Akira Amari also gave us some food for thought as he defended the BOJ’s recent decision to keep monetary policy unchanged. He said that the government plans to stick to its guns and isn’t worried about the recent volatility in the stock market.

In other news, the May trade balance numbers just came out and boy were they good! Japan’s trade deficit was narrower than expected at .82 trillion JPY (versus .89 trillion JPY forecasts), as exports posted its biggest increase since 2010! Looks like Abenomics is really working, eh?

No more reports coming out of the Land of the Rising Sun today. In the meantime, check out the FOMC statement if you plan on trading USD/JPY. The outcome of today’s statement could have some serious effects on the pair’s mid-term outlook!

Thanks to an intense rally in the dollar, USD/JPY soared up the charts and is now trading back above 96.50. The question is, is the yen rally finally over?

Truth be told, the jump in USD/JPY had very little to do with the yen and everything to do with the dollar. Thanks to the announcement that the Fed will likely begin tapering asset purchases later this year, the dollar soared up the charts, allowing USD/JPY to bounce off recent lows.

Moving forward, make sure you keep tabs on U.S. data and their effects on USD/JPY, as any sustained move on this pair will likely lead to similar moves on other yen pairs as well.

Well you can’t win 'em all, can you? The Japanese yen was able to outpace some of its major currency rivals, but it ended the day lower against the U.S. dollar, euro, and pound. USD/JPY closed at 97.01 while AUD/JPY ended up at 89.45.

There were no major reports on Japan’s economic schedule yesterday, leaving the yen at the mercy of currency-specific events. Upbeat U.S. sentiment, better than expected euro zone PMI figures, and higher than expected U.K. retail sales allowed USD/JPY, EUR/JPY, and GBP/JPY to end in the green. On the other hand, weaker than expected Chinese HSBC flash manufacturing PMI made the commodity currencies lag behind the yen.

For today, BOJ Governor Kuroda’s speech could rock the yen’s socks in today’s Asian session. Remember that the central bank’s quantitative easing program has drawn a lot of criticism lately, which suggests that Kuroda might step up to defend their efforts. If he hints that the BOJ could ramp up their easing efforts later on, watch out for a potential yen selloff!

Once again, the yen was no match to the dollar in Friday’s trading. USD/JPY finished higher at 97.76 after opening at 97.43. Meanwhile, against the euro, it was able to snag a win when EUR/JPY closed lower at 128.31 from 128.76.

BOJ Governor Haruhiko Kuroda spoke on Friday. However, his speech sparked very little interest in the markets. He pointed out that there’s still a lot of uncertainty surrounding the Japanese economy but he also expressed his optimism on the country’s road to recovery.

No major events are scheduled from Japan today. With that said, make sure that you keep close tabs on market sentiment. If markets continue to feel bullish for the dollar after the Fed’s speech last week, we could see further upside on USD/JPY.

With no major data out from the markets, the yen traded on the overall uptick in risk sentiment. EUR/JPY took a 6-pip slip, but GBP/JPY and AUD/JPY both registered intraday gains.

Japan didn’t release any economic report yesterday, but an improvement in the demand for higher-yielding currencies helped boost most of the yen crosses. This doesn’t mean that the Abenomics theme is over though. Word on the hood is that the BOJ is still closely watching the yen’s price action and is ready to intervene if they see a significant move that warrants action.

We won’t be seeing any reports from Japan again today, so keep an eye out for overall risk sentiment as well as the Asian markets for clues on the yen’s price action!

The Japanese yen traded in an almost perfect “V” pattern versus the U.S. dollar yesterday. USD/JPY started out at 97.66, fell to 97.00 during the London session, and then shot up to end the day 11 pips higher at 97.77 during the U.S. session.

No important data was released from Japan yesterday and there’s nothing on its economic calendar again today. This means that the yen’s movement will mostly be dictated by events occurring externally, especially the ones from the U.S. Also keep a close eye on market sentiment. If risk aversion hits the market, money could flow back into the yen and cause the currency to rally. Good luck trading today folks!

We got a little bit of everything from the yen. It ended the day practically unchanged in its clash against the dollar, but it managed to chalk up solid wins against the pound and the euro. However, it didn’t have the same luck against the comdolls, who were able to end the day with a rare victory over the safe haven currency.

With nothing on the economic calendar to guide traders, it’s not really surprising to see the yen trade the way that it did yesterday. Unfortunately, Japan’s calendar is almost as blank today – only the all industries activity report is due for release at 5:30 am GMT. It’s expected to show an increase of 0.5%, which is a nice little upgrade from the previous decline of 0.3%.

Take note, this report doesn’t normally get a lot of interest from the markets, so it’s probably best for you to check out what the U.S. has to offer if you plan on trading the news today. Good luck, homies!

The yen failed to tap its inner Samurai in Thursday’s trading. It lost to almost all of its counterparts, giving up 48 pips to the dollar, 94 pips to the euro, and 15 pips to the pound.

No reports were released from Japan yesterday. However, it looks like the yen failed to hustle some muscle when the Nikkei staged a rebound. Remember that the yen and Japan’s stock index share a negative relationship and we tend to see the yen get sold off when the Nikkei is up.

Earlier, we got a handful of reports from Japan. The core CPI reading for Tokyo just came in as expected at 0.2% while the unemployment overshot expectations by 0.1% at 4.1%. Meanwhile, retail sales came in more than twice the 0.7% forecast at 1.5%.

With mixed figures, I don’t think we’ll see the yen be able to recover much ground. But that’s just me! Be on your toes for any changes in market sentiment. Keep in mind that the currency tends to do well when risk aversion is in play!

Mixed as a bag of nuts! That’s how the yen’s performance was on Friday, as the Japanese currency lost ground to the U.S. dollar, gained against the Australian dollar, and consolidated against the British pound and the euro. Will it be able to find a clearer direction today?

The Japanese economy printed a lot of good figures last Friday, hinting that the BOJ’s massive easing program is already starting to bear fruit. Japanese retail sales jumped by 0.8%, higher than the estimated 0.1% uptick, while industrial production printed a jaw-dropping 2.0% increase. Inflation data came in line with expectations, as the Tokyo core CPI showed a 0.2% increase while the national core CPI stayed flat.

However, the household spending report came in below expectations with a 1.6% decline instead of the projected 1.5% increase. Jobs data was also weaker than expected, with the jobless rate holding steady at 4.1% instead of improving to 4.0%.

Earlier today, Japan printed the results of its Tankan survey. The manufacturing component came in stronger than expected, as it climbed from -8 to 4, outpacing the consensus at 3. The non-manufacturing component was in line with expectations at a reading of 12, which is a strong improvement from the previous reading of 6.

No other major reports are due from Japan for the rest of the week, but do take note that BOJ Governor Kuroda is set to give a speech on Thursday. With that, the yen could be driven mostly by risk sentiment and the behavior of the Nikkei for the rest of the week. Stay on your toes!