An improvement in risk sentiment dragged the yen lower last week. Can the bulls rally over the next couple of days?
Low-impact economic reports
It’s been a while since yen traders took cues from Japan’s economic data for direction. Still, surprises from reports scheduled this week could see some volatility for the safe haven.
The trade balance data is expected to show a deficit of 296.9B JPY, which is a departure from the 116.1B JPY surplus that we saw in January.
Japan’s industrial production, which showed a 1.4% growth in February, is expected to keep its reading in the revised release.
Last but not the least is the national annualized CPI, which is seen to show a 0.5% uptick after seeing a 0.2% increase in February.
Market risk sentiment
With not a lot of data on Japan’s plate, traders will likely take cues from global risk sentiment again.
Watch out for China’s data dump, which could give clues on how strong the world’s second largest economy is and how much it could demand from commodity-producing economies in the near future.
The euro region will also print a bunch of manufacturing and services PMIs. Stronger-than-expected releases would contradict the European Central Bank (ECB)’s dovish stance and likely extend the common currency’s last-minute rally. On the other hand, weaker releases would inspire some of the euro bulls to sell.
And then there are reports like the retail sales and manufacturing and services PMIs from Uncle Sam. As we’ve seen last week, demand for the dollar can affect overall risk appetite and move the low-yielding yen.
Missed last week’s price action? Read JPY’s price recap for April 8 – 12!