A dovish BOJ got nothing on risk aversion! Can yen bulls sustain rallies this week? Here are catalysts that might affect the yen.
Japan won’t be printing top-tier reports throughout the week, but we will see a parade of lower-tier releases that would paint a picture of Japan’s production activities.
The annualized PPI report (-0.5% expected, -0.1% previous) hints at the pricing of major businesses and is scheduled on Aug 13, 12:50 pm am GMT.
Preliminary machine tool orders, which gauges new orders placed with machine tool manufacturers, is up on Aug 13, 7:00 am GMT.
The core machinery orders (-1.1% expected, -3.7% previous) points to private sector demand for machines and is expected on Aug 14, 12:50 am GMT.
Finally, a revised industrial production estimate (expected to remain at -3.6%) is scheduled on Aug 15, 5:30 am GMT.
Part of the yen’s charm is that weaker global demand for its exports is somewhat compensated by stronger domestic consumption. This week we’ll find out just how weaker (or stronger) Japan’s production activities are.
Market risk sentiment
There are no major central bank policy decisions scheduled over the next couple of days but that doesn’t mean we won’t see volatility for the safe haven yen!
One look at forex calendars will tell you that Uncle Sam has CPI and retail sales figures on tap; the U.K. is rolling out its labor market, CPI, and retail sales numbers, and the euro zone is printing a second GDP estimate.
Any one of these top-tier reports could affect market risk appetite, so make sure you’re glued to the tube during the releases!
And then there’s the falling out between two major parties and, no, it’s not Liam and Miley.
Last week the Trump government imposed fresh tariffs on China’s products; branded China as currency manipulator; called on the Fed to weaken the dollar and cut rates (by as much as 1%!) and stopped doing business with Huawei.
China retaliated by preventing state-owned companies from buying American agriculture imports and allowing the yuan to weaken past the 7 yuan per dollar mark.
Will tensions escalate further this week? Watch the newswires and your Twitter feed closely in case we see headlines that would convince traders to load up on the safe havens!
Missed last week’s price action? Read JPY’s price recap for August 2 – 5!