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The BOJ got nothing on market risk aversion last week! Can yen bulls extend their momentum with this week’s potential catalysts?

Household spending reports

There aren’t a lot of top-tier reports scheduled from the world’s third-largest economy this week, but a series of lower-tier releases should give us a picture of how household spending is faring.

Average cash earnings and household spending numbers are up on August 6 at 12:30 am GMT.

Both reports are expected to reflect weaker annualized figures for the month of June, with the former seen at -0.8% after May’s 0.5% decline while the latter is expected to only gain by 1.3% after May’s 4.0% increase.

Remember that market players aren’t as worried over weaker export demand for Japan because domestic consumption is expected to pick up the slack in the economy. If this week’s household spending figures paint a different picture, then we could see the yen lose pips to its major counterparts.

Preliminary GDP (Aug 9, 12:50 pm GMT)

The last preliminary GDP release showed the economy rising by 0.5% in Q1 2019, as net exports contributed positively for the first time in four quarters. Heck, exports contributed the most to economic growth!

The report was later revised to reflect a 0.6% growth (instead of 0.5%) for the quarter.

This week analysts expect the economy to take hits from weakening export demand and a slowdown in consumption. They only predict 0.1% growth after last quarter’s 0.6% increase.

A much weaker than expected growth would put more pressure on the BOJ to be more aggressive in its easing policies, so keep your eyes glued to the tube for significant hits or misses!

Missed last week’s price action? Read JPY’s price recap for July 29 – August 2!