No major data scheduled in Japan this week! So what can move the yen around? Here’s a (short) list.
Overall risk appetite
As mentioned in last week’s price action recap, the yen mostly danced to the tune of the market’s risk sentiment.
Specifically, weak earnings from China and uncertainty over the U.S.-China trade negotiations kept the yen bears full until the Fed turned dovish, U.S. officials hinted of “significant progress” with China’s trade talks, and economic reports from other major economies came in better-than-expected.
With China out on a week-long holiday, it’s likely that focus will turn to the west. That is, traders could pay more attention to Uncle Sam’s data releases, Euro Zone’s PMI reports, earnings reports, and any Brexit-related updates.
Oh, and keep in mind that U.S. and Chinese trade reps have less than a month to iron out solid details on a possible trade deal before the trade war impasse ends at the start of March. Keep an eye out for speculations on what the Donald’s team are up to, will you?
While they’re not likely to dictate the yen’s price action, we could still see a blip or two during the Asian session when Japan prints its scheduled lower-tier reports.
Even then, we might not see much action until Thursday when the world’s third largest economy prints its leading index (12:00 am GMT), December household spending numbers (12:30 am GMT), current account balance (12:50 am GMT), average cash earnings data (1:00 am GMT), and Economy Watchers sentiment (6:00 am GMT).
Traders are generally expecting these household spending activity-related reports to print stronger numbers than their previous releases, so watch out for significant upside surprises in case they could add to the BOJ’s confidence on the economy.
Missed last week’s price action? Read JPY’s price recap for Jan. 28 – Feb. 1!