Another week, another chance to trade the yen as a safe haven? Here are catalysts that might move the low-yielding currency.
Lower-tier domestic reports
Last week’s top-tier reports had failed to cause sustained moves for the yen last week, so the chances are low that we’ll see bigger volatility from this week’s lineup.
Still, ya never know when traders are bored enough to look for catalysts, right?
Leading indicators (May 13, 6:00 am GMT) is up first, followed by the Economy Watchers sentiment index (May 14, 6:00 am GMT) which could give us hints on consumer spending in Japan.
Manufacturing and services activity is the theme of the second half of the week with the annualized preliminary machine tool orders (May 15, 7:00 am GMT), PPI (May 16, 12:50 am GMT), and tertiary industry activity (May 17, 5:30 am GMT) all on tap.
Market risk sentiment
Threats of higher tariffs for China’s goods kept the yen support for most of last week. Now that the U.S. has pulled the trigger on increased tariffs, all eyes will be on how China reacts to the move and how trade talks progress from here.
Word around is that Chinese President Xi Jinping is waiting on Vice Premier Liu He for updates on their negotiations in Washington before he pulls the trigger on any retaliatory moves.
The Chinese reps have also reportedly issued invites for the U.S. team to go to Beijing, but no deets have been shared about it just yet.
Market geeks speculate that we probably won’t see any meaty updates until the Donald and Xi Jinping themselves talk at the G20 Summit next month.
In the meantime, uncertainty around the current tariff scheme and China’s possible retaliation could extend the yen’s gains until another catalyst pops up.
Missed last week’s price action? Read JPY’s price recap for May 6 – 10!