Not a lot of data scheduled from Japan this week! Which catalysts do you think could move the yen in the next few days?
Flash manufacturing and services PMIs (Oct 24, 12:30 am GMT)
A report from Jibun Bank showed Japan’s manufacturing industry falling deeper into contraction as it slips from 49.3 to 48.9 in September.
The report noted “US-China trade tensions, the Hong Kong protests, Brexit and the diplomatic dispute between Japan and South Korea” as some of the headwinds the industry is facing.
The services sector also took hits, but not as sharply as manufacturers did.
Not surprisingly, the weak manufacturing data contributed to the yen’s weakness for most of the Asian trading session.
Will the “headwinds” of Japan’s manufacturing sector bleed into the services industry? Don’t miss this week’s release if you’re planning on trading the yen this week!
Market risk sentiment
What’s a trading week without trading the yen as a safe haven?
While last week’s economic catalysts weighed on the low-yielding yen, its losses were also relatively limited when you consider how the higher-yielding bets have popped up.
Does this mean that there are not a lot of yen sellers left?
Keep close tabs on Brexit-related updates to see if optimism over a deal can continue to sustain the market’s optimism.
In case you missed it, Prime Minister Boris Johnson was dealt a blow over the weekend when U.K. MPs voted to table any Brexit deal approval unless all legislation needed for the deal to happen are in place. Under the Benn Act, the delay also meant that BoJo had to request a three-month delay from the EU.
If Johnson manages to get some sort of working deal with the EU officials, then we could still see a continuation of last week’s optimism. But if last weekend’s vote leads to another delay and longer negotiations, then we could start to see uncertainty creep back into the markets.
Missed last week’s price action? Read JPY’s price recap for Oct. 14 – 18!