The yen just managed to end the week in positive territory last week. Can this week’s catalysts extend the yen’s gains?
Consumer-related reports (Sept. 6, Asian session)
Japan won’t be printing a lot of top tier reports this week, but news traders can wait for a bunch of consumer-related data coming out at the end of the week.
Remember that relatively strong domestic consumption activity has absorbed some of the impact of lower international demand for Japan’s goods.
This week we’ll see if this trend can continue. Household spending is expected to ease by 1.3% in July, which is a tad better than the 2.8% decline we saw in June. The more closely watched annualized figure is expected to slow down from 2.7% to 1.1%, however.
Average cash earnings, which measures income collected by workers, is expected to ease from 0.4% to 0.1% in July.
Last but not the least is a more general leading indicators index, which is expected to slip from 93.3 to 93.2 in July.
Overall risk appetite
A relatively empty data calendar for Japan means there’s more opportunity to trade the yen as a safe haven this week!
This week all eyes will be on updates on the U.S.-China trade negotiations. So far, neither party has hinted of adding tariffs on top of the ones that have gone live over the weekend.
We know from last week’s price action that even hints of phone negotiations between the world’s two largest economies can affect the tone of risk taking in the markets. Make sure you’re glued to the tube in case we see news (or tweets) that hint of progress towards a possible trade deal!
Other concerns could also factor into the mix this week. Economic data from the euro zone, for example, could either confirm or calm recession fears. Meanwhile, escalating clashes between protestors and authorities in Hong Kong could also stifle risk-taking.
Missed last week’s price action? Read JPY’s price recap for August 26 – 30!