Daily Economic Commentary: Japan

When risk is on, yen bears are out to play! The Japanese currency lost ground to its higher-yielding counterparts, as AUD/JPY climbed a few pips close to the 95.00 handle while USD/JPY bounced back above the 98.00 handle. Is the yen in for more losses?

As it turns out, the recent run in risk appetite was enough to push Japanese equities higher in yesterday’s Asian trading session. The Nikkei chalked up nearly 1% in gains, leading to a selloff in the negatively correlated Japanese yen.

As for economic data, there were no major releases from Japan yesterday and there are no reports lined up for today. With that, better keep close tabs on market sentiment throughout the day, particularly during the U.S. session when the September non-farm payrolls figure will be released. Good luck!

You win some, you lose… a lot? Although USD/JPY slipped lower yesterday, it didn’t make up for the huge jumps that we saw in yes crosses like EUR/JPY, GBP/JPY, and AUD/JPY.

Japan didn’t print any economic data yesterday, so the yen’s weakness could be attributed to the overall risk appetite that followed a weak U.S. NFP report during the U.S. session. Check out my USD update if you wanna know the deets on that!

The Land of the Rising Sun isn’t scheduled to print anything today either, so keep your eyes on Nikkei and the overall risk sentiment for clues on where the yen is headed!

Out of the way! Yen bulls charging! The Japanese currency received a strong boost from risk aversion and updates from China in yesterday’s Tokyo session, pushing USD/JPY below the 97.50 handle and EUR/JPY to a low of 133.60. Can the yen keep up its rallies today?

During yesterday’s Asian session, the lower-yielding Japanese yen was able to take advantage of the risk-off sentiment spurred by China’s surging money market rates. Apparently, this reminded traders that the Chinese central bank stopped adding stimulus earlier this month, which meant low liquidity and a potential downturn in growth. This was enough to give traders the goosebumps and force them to flee to safe havens!

There were no reports released from Japan then and there are no reports lined up for today, which suggests that yen trading could depend on risk sentiment once again. Stay on your toes for any updates from China and keep a close eye on Asian equity markets if you can!

Much like the Greenback, the low-yielding yen gained on the comdolls but lost out to the European currencies. USD/JPY and AUD/JPY slipped by a couple more pips but EUR/JPY and GBP/JPY managed to end the day in the green.

We didn’t see any economic data from Japan yesterday, so the yen most likely traded on risk sentiment instead. Let’s see if that will be the case again today when traders react to Japan’s inflation numbers.

A few hours ago we saw Tokyo’s CPI come in at 0.3%, which is a bit lower than the expected 0.4% uptick. Even Japan’s CPI reading came in at 0.7%, slightly lower than last month’s increase. No other data is scheduled for release today, so pay attention to any news that might affect risk appetite!

The yen sure knows how to have a good time on a Friday! The Japanese currency edged higher against its major counterparts, particularly the Aussie and the Loonie, then consolidated against the U.S. dollar and the pound. What’s up with these weekend gaps among yen pairs though?

Thanks to the drop in Japanese equities, the Japanese yen was able to extend its rallies before the week came to a close. Apparently, traders are still uneasy about the rise in Chinese money market rates so they decided to dump their higher-yielding equity holdings in exchange for safer and lower-yielding assets. As for Japanese data, inflation reports came in mixed, with the Tokyo core CPI posting a weaker than expected reading of 0.3% and the national core CPI figure showing a 0.7% increase in price levels.

There are no reports due from Japan today so it could be all about market sentiment for the yen! Make sure you stay tuned for any updates on the Nikkei and Asian stock markets to figure out if yen pairs are in for another round of selling. Good luck!

Another one bites the dust! Thanks to a slight risk aversion in the markets, the yen crosses ended the day in the red. USD/JPY gave the best fight with only a 3-pip loss but EUR/JPY, GBP/JPY, and AUD/JPY weren’t as lucky with their 20-pip or so losses.

Japan didn’t print any news report and Nikkei had a pretty okay day yesterday, but that didn’t stop the yen crosses from falling. As it turned out, a day of thin trading for the major currencies wasn’t good for the high-yielding currencies.

A few hours ago Japan’s annualized retail sales report showed a 3.1% gain for the month of September, which is better than the 1.9% gain that many had been expecting. The 3.7% uptick in household spending was also a boon, especially since analysts had only been expecting a 0.7% increase. Will these reports change the tides for the yen crosses? Watch your yen trades closely!

Why, thank you risk aversion! The yen was able to edge a little higher than its major counterparts in yesterday’s trading, as EUR/JPY retreated to a low of 134.34 while AUD/JPY fell below the 93.00 handle. Can the yen keep up its gains?

Japan printed better than expected economic figures yesterday, as both household spending and retail sales increased much more than projected. This was enough to provide a bit of support for the Japanese currency during the Asian session but what really boosted the yen’s spirits was the run in risk aversion which happened after the U.S. economy printed disappointing data.

Earlier today, Japan released a weaker than expected industrial production figure of 1.5%, lower than the estimated 1.8% rise. On top of that, the previous period’s reading was revised lower to show a 0.9% decline. No other reports are due from the Japanese economy today so yen trading could be sensitive to market sentiment.

Down for another day! The low-yielding yen weakened across the board on an improvement in the Asian markets. USD/JPY reached the 98.50 area while EUR/JPY popped up by 50 pips.

Too bad that Japan’s better-than-expected reports aren’t helping the yen. In fact, it’s helping the Japanese stocks, which takes the bulls’ attention away from the low-yielding currency.

The BOJ is up today with its monetary policy decision! Analysts expect the central bank to upgrade its growth forecasts and hint at more stimulus to fight deflation. We can’t discount surprises though, so keep close tabs on your yen crosses in case we see extra volatility!

Saddle up, yen traders, the bulls are charging! The Japanese currency advanced by roughly 200 pips against the euro, as EUR/JPY tumbled from the 135.00 area to 133.00. GBP/JPY chalked up a smaller decline, as it found resistance around 158.00 but bounced from a low of 157.28.

The BOJ keep monetary policy unchanged in yesterday’s interest rate statement but announced upgrades for its growth forecasts. They are expecting to see 1.5% growth next year, higher than their previous 1.3% estimate. For 2015, they kept their GDP estimate unchanged at 1.5%. As for inflation, they kept their forecasts unchanged for the next couple of years.

There are no reports due from Japan today, which means that the yen might be driven by risk flows. Do watch out for potential profit-taking ahead of the weekend, too!