A pretty busy week for the yen, as Japan is set to print top and mid-tier data over the next couple of days. How can they affect the yen’s price action?
Manufacturing, consumption, and CPI-related reports
In case you missed it, Bank of Japan (BOJ) head honcho Kuroda has officially gone back to hinting at easier monetary policies. Just last week he shared that:
“If (currency moves) are having an impact on the economy and prices, and if we consider it necessary to achieve our price target, we’ll consider easing policy…”
Because of this, investors will likely pay closer attention to this week’s inflation, manufacturing, and consumption-related reports for clues on how soon the BOJ might implement their easier policies.
Consumer price-related reports will come in the form of the BOJ’s core CPI (Feb 26, 5:00 am GMT), followed by Tokyo’s core CPI (Feb 28, 11:30 pm GMT) report that’s considered as a leading indicator for the nation’s numbers.
Meanwhile, the preliminary industrial production report for January (Feb 27, 11:50 pm GMT), capital spending for Q4 2018 (Feb 28, 11:50 pm GMT), and the final manufacturing PMI for February (March 1, 12:30 am GMT) will tell us how vulnerable Japan’s manufacturing sector is to external (read: global trade) shocks that could come its way this year.
Finally, we’ll know more about Japan’s consumption trends when we see the January retail sales report (Feb 27, 11:50 pm GMT), January unemployment rate (Feb 28, 11: 30 pm GMT), and February consumer confidence data (Mar 1, 5:00 am GMT).
While these reports don’t usually affect the yen’s price action for long, the BOJ’s recent threats of easy policies could make investors more responsive to upside or downside surprises in these reports. Make sure your trades don’t get caught in any volatile news-related moves!
Overall risk sentiment
What’s a trading week without trading the yen as a safe-haven?
Like most of the comdolls, the low-yielding yen will likely take cues on updates regarding the U.S.-China trade negotiations.
An extended meeting over the weekend, along with Trump’s optimism that a deal would be made, raised hopes that the POTUS could at least extend the March 1 trade tariff truce if not sign concrete memoranda with the Chinese reps.
Uncle Sam is also scheduled to print some top-tier reports over the week, which could support the FOMC members’ recent dovish shift. If trade war updates fail to move the dollar strongly in one direction, then we could see speculation over the U.S. economy influence global risk sentiment.
Missed last week’s price action? Read JPY’s price recap for February 18 – 22!